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Gaps in commitments by developed countries hamper progress on MDGs – UN
Despite improvements in the lives of millions of people around the world, the United Nations today reported that persistent gaps between promises made and those delivered by developed countries are holding back greater progress on reaching the eight anti-poverty targets known as the Millennium Development Goals (MDG) by the end of 2015.
“I call on all Governments and international institutions to continue strengthening the global partnership for development so that we can usher in a more sustainable future,” Secretary-General Ban Ki-moon said on the launch of the new report.
He urged leaders and citizens to “boldly step forward” to eradicate poverty, raise living standards and sustain the environment.
Recent statistics show that many targets are already met – such as reducing poverty, increasing access to improved drinking water sources, improving the lives of slum dwellers and achieving gender parity in primary school.
According to the report, “The State of the Global Partnership for Development,” progress on other MDGs, however, has slowed.
The report, produced by the MDG Gap Force Task Force which is co-chaired by the UN Department of Economic and Social Affairs and the UN Development Programme (UNDP), tracks delivery on commitments listed under MDG 8. That target focuses on the global partnership for development, including aid, trade, debt relief, access to essential medicines and access to technologies.
“With only one year ahead, we definitely need a strong sense of urgency and action,” Wu Hongbo, Under-Secretary-General for Economic and Social Affairs, told journalists in New York.
For example, despite a rebound in official development assistance (ODA), the gap between the Goal 8 targets and policy delivery remains wide, the report notes.
The commitment of 0.7 per cent of donor country gross national income (GNI) is estimated at $315 billion, but in 2013 an estimated $135 billion was delivered leaving a $180 billion gap.
In market access, the authors reported that the Group of 20 (G20) major economies reaffirmed to refrain from protectionist measures, but created new trade restrictions in 2013 which “could undermine confidence” in their commitment to an open and liberal trading system.
“As the 2015 deadline for achieving the MDG approaches, the Task Force calls for a final push towards improving marked access for developing countries,” according to the report, “and continuing efforts to eliminate all agricultural export subsidies, trade-distorting domestic support and protectionist policies.”
Among other points in the report, the authors noted that technological access for developing countries is growing at a fast pace. In particular, mobile phone usage, whose subscribers in the developing world will reach 78 per cent by the end of the year.
Yet, while Internet use is spreading at a faster rate in developing countries than developed nations, more than four billion people are still unable to go online. While mobile-broadband penetration in 2014 is expected to reach 84 per cent in developed countries, it barely exceeds 21 per cent in the developing world.
The report also highlights the prices of essential medicines, which are three times more expensive in the public sector than international reference prices and five times higher in developing countries’ private sector.
These are some of the discussion points as the international community will prepare the post-2015 sustainable development agenda.
According to Magdy Martínez-Solimán, UNDP Deputy Assistant Administrator, these are among the “so-called unfinished business” that has to be and which will be the core of the next agenda.
“This is the legacy where efforts have been made, successes have been earned but there is still a journey ahead,” he told journalists in a press conference.
Also participating in today’s press conference on the launch of the report were Thomas Gass, Assistant Secretary-General for Policy Coordination and Inter-Agency Affairs, and the Director of Development Policy and Analysis Division at DESA, Pingfan Hong.
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Africa urged to push for joint tourism agenda
Tourism in Africa will tremendously improve if the continent’s image is promoted by regional blocs rather than individual countries, experts have said.
The idea was mooted yesterday at the World Export Development Forum. The two-day Forum, organised by the International Trade Centre, closed yesterday in Kigali.
At a session dubbed, “Tourism for development: opportunities for SME trade,” experts assessed the stereotypes and generalised negative connotations about Africa, arguing that tackling these challenges through collective blocs would pay off by attracting more tourists.
“Seychelles did not face the Ebola epidemic like some countries in West Africa did. Not even our neighbours faced Ebola. However, tourists to our country have decreased,” Alain St. Ange, the Seychelles minister for tourism and culture, said.
“Many people in the West still harbor ignorant opinions about Africa and they do not define us according to our borderlines. We may have our national tourism brands intact, but we need to develop regional brands to attract tourists and to counter the negative beliefs of some people who think that an epidemic in one part can affect the entire continent.”
Unnecessary competition
His view was echoed by the Abdou Jobe, the Gambian minister for trade and integration, who said individual nations should not compete for tourists since they share similar natural and social attractions.
“We should not compete for tourists among ourselves in Africa. We need to groom the African cake and present it to the world. We have very many similar attractions and we should showcase as one,” he said.
“Secondly, before we ask others to come visit us, we should first carry out visits among ourselves. We should first appreciate our natural and biodiversity attractions before the rest of the world does.”
Pascal Lamy, the Chairman of World Committee on Tourism Ethics at the United Nations World Trade Organisation, commended the single tourist visa between Rwanda, Kenya and Uganda, as an initiative that will pay off by easing the costs and procedures required by tourists.
A single tourist visa for the three countries took effect in January 2014, eliminating national requirements for visa applications and enabling tourists to move within the three countries without restrictions.
Under the single visa, a tourist to the three countries pays US$100 at the country of entry or the respective foreign missions abroad. Previously, Uganda and Kenya charged $50, while it cost $40 in Rwanda.
“Other blocs should follow suit. The single tourist visa was a brilliant idea. What public authorities should do now is to ensure that they connect their most important tourist sites with modern infrastructure, such as internet connections and air strips, so that life can be made easier for tourists,” Lamy said.
Rwanda’s tourism revenues hit $251 million in 2011, representing 25.5 per cent increase from the previous year.
The figure rose to $293.6 million from $281.8 million in 2012.
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MPs seek new funding model to ease debt burden on Kenya
Members of Parliament want the government to explore new funding models for development projects to avoid overburdening the country with debts.
In a report released this week, the Parliamentary Budget Office said the government ought to find innovative ways of raising capital to finance the much-needed infrastructure upgrade and other development projects, avoiding putting the country in huge debts (download the MP’s Budget Watch 2014/15 here).
“Given that Kenya is a developing country, there is an inherent need for implementation of major infrastructure projects that promote growth and service delivery of services, which result in huge capital demands that inevitably lead to borrowing to close the deficits,” the report says.
They added; “However, Kenya can use a mix of alternative forms of financing such as public-private partnerships, annuity concessions and project bonds as alternative to traditional debts.”
The country’s debt portfolio has been increasing reaching 51.1 per cent of the Gross Domestic Product to Sh2.1 trillion in March. Out of this, 42 per cent is external debt and 57.9 per cent is domestic debt.
DOMESTIC BORROWING
The MPs have also requested that the government reduces its domestic borrowing to trigger a drop in interest rates.
“It is evident that the interest rate margins for Kenya are relatively higher than other African countries. Whereas the interest margins in Kenya were around 8 and 9 per cent between 2009 and 2012 Mauritius, South Africa,
‘‘Thailand and Namibia had interest rate spreads of around 1.4, 4.5, 4.8 and 6 per cent respectively. It is, therefore, evident that the private sector in other African countries is enjoying an advantage in terms of cost of credit and returns on savings which are both contributors to economic performance,” the report says.
Government investment is projected to grow by 16.4 per cent, 18.6 per cent and 29.5 per cent in 2015, 2016 and 2017 respectively due to the ongoing and planned investment in large infrastructure projects in the medium term.
The projects include the standard gauge railway, the Lamu Port Southern Sudan Ethiopia Transport Corridor, investment in geothermal energy generation at Olkaria and Menengai, Mombasa-Nairobi power transmission line, expansion of Jomo Kenyatta International Airport and major national roads among others.
The greatest challenge, the report says, is in low absorption of development funds from donors.
In July, the absorption rate of the 2013/14 budget stood at 55 per cent and 48 per cent for loan appropriations in aid and loan revenue respectively. The rate is slightly above that of 2012/13 during which 50.65 per cent of the total donor funds was absorbed.
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Egypt’s private sector: A driving force for job creation
Egypt needs better jobs. It also needs more jobs. The small-sized firms Egypt needed to employ Egypt’s young working population aren’t growing fast enough to meet the demands. Although overall employment has remained stable in recent years, the trend has been toward a growth in jobs in the informal sector that are often disturbingly insecure.
The World Bank’s Egyptian Labor Market Report 2014 “More Jobs, Better Jobs: A Priority for Egypt” sees this as the result of stagnation in Egypt’s formal private sector over the last 15 years. Along with a decrease in public sector hiring, the gap in employment has been filled with informal jobs offering neither written contracts nor social insurance.
This burden of the jobs shortage has fallen primarily on Egypt’s youth. More than 75 percent of the country’s unemployed are young – between 15 and 29 years of age. Young Egyptians are two to three times more educated than the previous generation. However, young men find themselves having to work in lower quality jobs than they would like and young women have been withdrawing from the labor market entirely.
The sort of fast-growing small firms that generate employment in most economies today are in shorter supply than needed. Large Egyptian firms haven’t grown and, in the process, created more jobs. These firms were born large as a result of the privatization of state-owned enterprises. Partly due to the country’s economic policies, micro-firms are faced with a myriad of challenges that prevent them from fully joining the formal sector and competing with old, large, privileged firms.
Within the industrial sector, for example, access to state energy subsidies favors a few old, large firms. The Bank’s new report suggests that if the government stopped giving well-connected firms like these preferential treatment and applied the same regulations uniformly, younger smaller firms would be able to compete with more established ones. This will ultimately result in a dynamic private sector.
If the government also offered the private sector credible signs of transparency and accountability, it could restore the sector’s confidence and encourage investment and job generation.
The Bank’s report proposes a three-level approach to the dilemma facing the informal sector. It suggests that informal firms should turn into formal employers and provide them with incentives to formalize their workers’ contracts. The report also suggests that people employed informally should be provided with job protection through unions, non-governmental organizations (NGOs), or public-private partnerships.
Another issue that affects the job sector in Egypt is that the lion’s share of jobs is/are found within easy reach of the country’s main metropolitan areas, Cairo, Alexandria, and Port Said. Over half the jobs in Egypt’s formal private sector are located in these areas, where only a quarter of Egyptians live. Egyptians living farther away have almost no real access to the formal private sector. This problem is exacerbated by the limited amount of internal migration in Egypt.
Large scale infrastructure development projects could provide jobs for less well-educated Egyptians. Moreover, improving transport networks into Egyptian cities, as well around them, could help solve several problems and provide people living outside major cities better access to the formal private sector. Providing safe and reliable commutes could also encourage women’s participation in the workforce and solve the limited mobility challenges they suffer from.
Egypt’s investment in education has led to secondary (high school) and post-secondary (college) graduation rates comparable to men’s, but more than 40 percent remain unemployed. Women are extremely unlikely to work in the formal private sector because of a large gap in wages, with women earning 35 to 40 percent less than men, compared to a gap in the public sector of only 2 percent.
In addition, public sector jobs offer women generous benefits, shorter, more flexible working hours, and more leave. Despite all this, however, women are willing to work in the formal private sector, if they can (literally) get there. The report shows that Egyptian women who lived close to metropolitan centers were six times more likely to find work in the formal private sector than those who didn’t.
The problems Egypt’s labor market faces are substantial but not insurmountable. By reforming Egypt’s economic policies and public services, the government can help to bring better quality jobs to a new generation of educated Egyptians.
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On the Budget Trail: The MP’s Budget Watch 2014/15
The Key Message
At the moment, given the current economic environment, the 10% economic growth target envisaged in Vision 2030 appears to be unachievable in the medium term. Notably, the country is grappling with insecurity and a persistent election mood since the 2013 polls which have slowed down economic activity and are likely to adversely affect investor confidence. For this country to achieve a higher growth rate there is need to go back to productive engagement focusing on efficiency in implementation of the budget as a tool to achieving higher growth.
In the 2014/15 financial year and the medium term, the budget is facing a hard financial constraint and it is likely that the country won’t be able to mobilize additional resources as the baseline for resource mobilization is not feasible. Currently, there is so much focus on resource mobilization but not on efficiency gains in terms of budget implementation. Our focus should be on reducing non-priority expenditure and focusing on efficiency in the utilization of resources as a way of promoting growth while keeping deficit spending in check.
On the other hand, even as Kenya targets to achieve some key milestones under Vision 2030, the MDG goals appear off-track and with less than 200 days to go, it is highly unlikely that they will be achieved by 2015. Despite significant efforts made to achieve universal primary education and more recently, to improve maternal health through provision of free maternal healthcare, the country appears to be far from achieving most of the other MDGs. Poverty, hunger, disease prevalence, child and maternal mortality remain high.
The recent introduction of free maternal healthcare by the Government should not be construed to mean, “go ye forth and reproduce.” The country must work hard to control the high population growth rate which if left unchecked, will continue to put a strain on health services and education provision.
Already, despite free primary education, the country’s education policy appears to be off target amid quality concerns. High primary school enrolment rates mean that teacher-pupil ratios have worsened and the quality of education in primary schools appears to be deteriorating. Furthermore, education in tertiary institutions is biased towards white collar jobs at the expense of technical, industrial based qualifications. 2014/15 should be the year where major emphasis is on efficiency and effectiveness. This country has a potential to attain a two digit growth rate through efficiency in utilization of available resources. The focus should be, “Fanya Kazi, Tenda Wema na Mungu atakubariki.”
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Ebola: Long-term economic impact could be devastating
The Ebola epidemic in West Africa has stolen the lives of more than 5,000 people since January 2014. In addition to lost lives, the disease is dealing a severe economic blow to families and governments. Closed borders and abandoned farms are driving up food costs leaving many people in rural communities hungry. Emergency spending on health services is drawing money from already cash-strapped government budgets. The epidemic could reverse years of economic gains made by countries in this developing part of the world.
A new World Bank report outlines the long-term toll the Ebola crisis could take on the three most heavily affected countries – Guinea, Liberia and Sierra Leone – if those countries and their partners don’t immediately ramp up efforts to contain the disease outbreak. At the low-end, according to the report The Economic Impact of the 2014 Ebola Outbreak, the loss to countries’ GDPs could be $4.8 billion if the epidemic is contained by December 2014. Worst case scenarios show a staggering loss of $49 billion by the end of 2015 if the disease spreads to neighboring countries.
Guinea
The impact is already evident in Guinea, Liberia and Sierra Leone, the three countries with the highest number of Ebola cases. Early estimates for growth in Guinea have been halved from 4.5% to 2.4% as a result of the disease. Already among the poorest countries in West Africa with a population of 12 million, Guinea has seen the biggest losses in its agriculture industry. An exodus of farm workers from the countryside has meant lower exports of key products like cocoa and palm oil.
Sierra Leone
Sierra Leone, once navigating toward Middle Income status at an 11.3% annual growth rate could see growth of only 8% in 2014 and zero in 2015. The disease has spread to all but one of the country’s 13 districts, with four doctors and 30 nurses among the dead. The country has been devastated by restrictions on international travel, the closing of markets, disruption of farming activities and a slow-down in critical mining operations as a result of foreign workers fleeing the country for fear of contracting Ebola.
Liberia
Liberia is currently the country worst affected by the Ebola crisis. The virus has spread quickly, rates of infection are surging and deaths continue to rise. According to the report: “The largest economic effects of the crisis are not the direct costs (mortality, morbidity, caregiving, and the associated losses to working days),” the report reads, “but rather those resulting from changes in behaviour – driven by fear – which have resulted in generally lower demands for goods and services and consequently lower domestic income and employment.”
The country could see negative growth rates in 2015 – if Ebola is not quickly contained – impacted by the closure of one the country’s two major mining companies as a result of the disease outbreak and by disruptions to farming and agriculture. The services sector has also been affected. Liberia has seen incoming commercial flights slump from 27 per week to just six. Some hotels have reported occupancy rates as low as 10% leading many hotel workers to lose their jobs.
So far, neighboring countries have had limited economic impacts as a result of the epidemic, but that could change if measures are not taken to quickly contain the disease and prevent its spill-over, the report warns. Countries that could be affected include Nigeria, Cote d’Ivoire, Guinea-Bissau, Senegal and The Gambia.
The overall impact of Ebola is evident in two distinct areas, the report reads. First are the direct and indirect effects of sickness and death. Second are the behavioral effects resulting from peoples’ fear of a spreading epidemic, which in turn leads to a fear of interacting with others, closes the workplace, disrupts transportation and panics governments and businesses into closing seaports and airports.
Recommendations
Limiting the human costs and economic impacts of Ebola Virus Disease will require significant financial resources, coordination between international partners and the affected countries and commitment. The report recommends the following measures:
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Supporting the humanitarian efforts to finance medical equipment, emergency treatment units and personnel salaries
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Helping countries bridge the $290 million fiscal gap for 2014 and continue as the gap grows in 2015
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Providing infrastructure and financing to countries’ international transportation links
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Strengthening the surveillance, detection and treatment capacity of African health systems
“Taken together,” the report says, “the humanitarian response, the fiscal support, the investment in secure transportation links and the expanded disease surveillance and treatment capacity will not only stem the Ebola epidemic, but help to reverse as quickly as possible the aversion behavior that is causing so much economic damage.”
Fact Sheet: Emergency Financing for the Ebola Crisis
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India likely to be world’s fastest growing exporter
India is likely to become the world’s fastest growing exporter and UAE’s top export and import destination by 2030, according to a study.
The latest HSBC Trade Forecast on Tuesday tipped that India has the potential to become world’s 5th largest exporter of goods by value from the 14th spot from 2014 to 2030.
Besides India, UAE’s fastest growing export markets will be China, Malaysia, Turkey – each of which will see the fastest growth rates between 2017 and 2030.
Import growth for UAE will be fastest for goods originating from China, India, Turkey and Vietnam.
“Sectors such as infrastructure and construction, tourism, retail and government investments in technology will continue to be the main drivers of the UAE’s economy going forward.
With that said, we still expect petroleum products to remain both the largest category of total exports and the largest contributor to total export growth up to 2030,” said Tim Evans, Regional Head of Global Trade and Receivables Finance.
“It (petroleum products) will account for over 40 per cent of total export growth over this forecast horizon. So it is no surprise to see energy hungry countries such as India and China on top of the UAE’s export list,” said Evans.
By 2030, China is expected to increase its overseas shipments five-fold as it strengthens commercial ties to emerging Asia, the Middle East and North Africa.
According to the Trade Confidence Index, the UAE remains firmly positive about increasing trade activity over the next six months.
The country ranked third out of the 23 countries surveyed. 47 per cent of respondents believe trading volumes will increase ‘slightly’ over the next 6 months, and another 16 per cent believe the increase in trade volumes will be ‘significant’.
An increase in demand – either globally or in key markets – is cited as the basis for this increase by around 45 per cent of respondents.
Globally, world trade is set to resume its growth trajectory in 2016, presenting fresh opportunities for businesses that have positioned themselves to benefit.
The Index showed that 65 per cent of businesses surveyed reported current trade activity with these regions while 75 per cent believe that Asia or Middle East and North Africa will have the best opportunities of growth over the next 6 months.
“UAE importers will continue to have their main focus on Asia and intra-regional trade as well. It will be these markets that prove to be the fastest growing corridors for the country’s long term import growth,” said Evans.
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Slowing climate change makes economic sense; cities to lead – study
Investments to help fight climate change can also spur economic growth, rather than slow it as widely feared, but time is running short for a trillion-dollar shift to transform cities and energy use, an international report said on Tuesday.
The study, by former heads of government, business leaders, economists and other experts, said the next 15 years were critical for a bigger shift to clean energies from fossil fuels to combat global warming and cut health bills from pollution.
“It is possible to tackle climate change and it is possible to have economic growth at the same time,” Felipe Calderon, a former Mexican president and head of the Global Commission on the Economy and Climate, told a news conference.
Many governments and businesses wrongly fear that measures to slow climate change will undermine jobs and growth, he said. The report is meant to guide world leaders at a Sept. 23 climate summit hosted by U.N. Secretary-General Ban Ki-moon.
Almost 200 nations are working on a U.N. pact, due to be agreed in Paris in late 2015, to rein in rising greenhouse gas emissions. Progress to combat global warming has been slow despite two decades of work.
“How the world’s largest and fastest-growing cities develop will be critical to the future path of the global economy and climate,” the report said, recommending a shift to “compact cities” that used less energy and invested in public transport.
Cities are home to half of the planet’s 7.2 billion people, generate 80 percent of global economic growth and account for about 70 percent of energy-related greenhouse gas emissions, it said. But many urban areas are sprawling out of control.
TIME SHORT
The report said the next 15 years were vital because, in that time, “the global economy will grow by more than half, a billion more people will come to live in cities” and new technology will change businesses and lives.
A U.N. panel of experts says swift action is needed to avert more heatwaves, floods, droughts and rising seas. It says it is at least 95 percent probable that human activities, rather than natural swings in the climate, are the main cause of warming.
Overall, the Commission said that $90 trillion in investments were needed in the next 15 years to keep a high-carbon model of infrastructure for cities, transport, energy and water systems, or an average $6 trillion a year.
A shift to low-carbon energy, such as wind or solar power, and greener cities would cost a further $270 billion a year – a 4.5 percent increase in the bill that could be offset by other savings, for instance on fuel.
“Investing in a low-carbon economy is a cost-effective form of insurance against climate risk,” it said.
Among drawbacks with the existing economy, the report said air pollution cost 4.4 percent of world gross domestic product, with a high of more than 10 percent of GDP in China.
Jeremy Oppenheim, director of the report, said China and other emerging nations had grown aware of the risks of coal-based growth and fast-expanding cities. “Things are very different even compared with five years ago,” he told Reuters.
In rich nations, inefficiencies still abounded in cities such as New York, London or Paris. “Twenty percent of fuel costs in cities are spent looking for parking spots,” he said.
Unlike past climate change studies which have focused on the risks of inaction, the report seeks to show economic benefits of investments which could also help the environment, he said.
The report urged governments to phase out fossil fuel subsidies totaling more than $600 billion a year, far more than $100 billion in annual support given to renewable energy.
And it urged better use of farmland. “Restoring just 12 percent of the world’s degraded agricultural land could feed 200 million people by 2030, while also strengthening climate resilience and reducing emissions,” it said.
In April, a report drawing on the work of 1,000 experts said that a shift to low-carbon energy would trim about 0.06 percent a year off world economic growth.
It did not compare costs and benefits as starkly as Tuesday’s report.
Nicholas Stern, a former World Bank chief economist who was a member of the commission, urged governments to abandon what he called an “artificial horse race” between economic growth and action to combat climate change.
“The challenge is to combine the two,” he said. “That is the only sensible route,” he said.
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World hunger falls, but number of undernourished remains ‘unacceptably high’ – joint UN report
More than 800 million people – or one in every nine on the planet – suffer from hunger, but a new joint UN agency report released today stated that the Millennium Development Goal of halving the proportion of undernourished people by 2015 is still within reach.
The State of Food Insecurity in the World report released in Rome by the UN Food and Agriculture Organization (FAO), the International Fund for Agricultural Development (IFAD) and the UN World Food Programme (WFP), confirmed a positive trend, which has seen the number of hungry people decline globally by more than 100 million over the last decade and by more than 200 million since 1990-92.
“China alone has reduced the number of undernourished people by 138 million in this period, while the 10 countries that have achieved greatest success in reducing the total number of hungry people in proportion to their national population are: Armenia, Azerbaijan, Brazil, Cuba, Georgia, Ghana, Kuwait, Saint Vincent and Grenadines, Thailand and Venezuela,” FAO said in a press release.
The overall trend in hunger reduction in developing countries means that one of the key Millennium Development Goals (MDGs) of halving the proportion of undernourished people by 2015 is within reach, “if appropriate and immediate efforts are stepped up,” the report said.
To date, 63 developing countries have reached the MDG target, and six more are on track to reach it by 2015, it said.
“This is proof that we can win the war against hunger and should inspire countries to move forward, with the assistance of the international community as needed,” the heads of the three UN food agencies wrote in their foreword to the report.
The report noted how access to food has improved rapidly and significantly in countries that have experienced economic progress, notably in Eastern and South-Eastern Asia.
Access to food has also improved in Southern Asia and Latin America, but mainly in countries with adequate safety nets and other forms of social protection. Despite significant progress overall, several regions and sub-regions lag behind.
“In Sub-Saharan Africa, more than one in four people remain chronically undernourished, while Asia, the world’s most populous region, is also home to the majority of the hungry – 526 million people,” according to the report.
“Very slow progress was recorded in several African countries, including Botswana, Cote d’Ivoire, Madagascar, Malawi, Namibia, Uganda, Tanzania and Zambia, where the number as well as prevalence of undernourished people in the population increased,” according to the report.
“The same was true of Asian countries such as the Democratic Republic of Korea, Iraq, Tajikistan and Uzbekistan, among others. In Latin America, El Salvador and Guatemala show relatively slow progress, despite the good performance of the region as a whole.”
With the number of undernourished people remaining “unacceptably high”, the agency heads stressed the need to renew the political commitment to tackle hunger and to transform it into concrete actions.
Latin America and the Caribbean have made the greatest overall strides in increasing food security. Meanwhile Oceania has accomplished only a modest improvement. The FAO, IFAD and WFP report specifies that hunger eradication requires establishing an enabling environment and an integrated approach.
This year’s report includes seven case studies – Bolivia, Brazil, Haiti, Indonesia, Madagascar, Malawi and Yemen – that highlight some of the ways countries tackle hunger and how external events may influence capacity to deliver on achieving food security and nutrition objectives.
The findings and recommendations of the report will be discussed by governments, civil society, and private sector representatives at the 13-18 October meeting of the Committee on World Food Security, at FAO headquarters in Rome.
The report will also be a focus of the Second International Conference on Nutrition in Rome from 19-21 November, which FAO is jointly organizing with the World Health Organization. This high-level intergovernmental meeting seeks renewed political commitment to combat malnutrition with the overall goal of improving diets and raising nutrition levels.
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EAC Integration series: Regional integration; an awakening long overdue
Regionalism has gained strong momentum in sub-Saharan Africa. Statistics and trends have proven that regional groupings, not only provide opportunities for addressing common challenges, they also improve economic policy, increase market-size and competitiveness, attract foreign direct investment, and pool resources for investment towards common and mutual benefit.
Regional integration is now a recurrent item and household theme in the development agenda of African policy makers. Most countries are members of regional economic communities whose long-term aim is the achievement of deep forms of integration such as currency and monetary unions.
For a decade now, economic growth in sub-Saharan Africa has exceeded an annual 5 per cent, giving it a 4.1 per cent share of global trade. This is a meager increase from 3.4 per cent in 2000. On that note, the need for joint and long-term economic strategies (integration) has now come to be viewed as a necessary ‘problem’ that countries have to confront in their attempts to modernise, and achieve self-sufficiency.
Countries are sometimes perceived as too small to provide significant domestic markets for both heavy and light industrial goods produced by techniques meant for larger scales of production. This forces them to abandon industrialisation or to adopt inefficient production techniques. These small countries are often competing with one another in international markets, significantly reducing their bargaining power in complex industrial markets.
In addition, the fact that many African economies are dependent on a small number of similar primary products generally affects their participation in global trade. Although it is starting to grow, Africa’s participation in world trade has never been significant.
Renowned authors and experts in this field, like Richard Mshomba and Ernest Aryeteey, have analysed and optimistically stated that increased trade within and among African nations could bring greater advantages to the nations involved, and help them cohesively mobilise resources by accessing markets for their goods.
Therefore, economic co-operation and integration are not ends, but means towards sustainable economic development. African leaders have long recognised the significant opportunities presented by the regional approach to development and have supported regional efforts in a bid to sustain advances made in economic policy reform and democratic governance.
Uganda’s President Yoweri Museveni, for instance, once rightfully declared: “Our states are too small, and that is why we cannot solve our problems. We have small markets that are not conducive to stimulate production. Africa should have concerted economic programmes for the benefit of all the countries on the continent.”
Africa currently has four major integration movements that promote common goals of economic transformation and development, including eradication of poverty. These are the South African Development Co-operation (Sadc), the Economic Community of the West African States (Ecowas), and the Common Market for East and Southern Africa (Comesa), as well as the East African Community (EAC), which was “re-launched” on January 15, 2001 in Arusha, Tanzania after it had collapsed decades earlier.
This cycle of articles will focus mainly on the EAC and bring insights into what led to the collapse of the Community in 1977, and if – bearing in mind progress thus far – it will survive this time, with its re-launching 24 years after demise. Or is the new EAC nothing more than a case of ‘history repeating itself’? Are we, East Africans, inadvertently shooting ourselves in the foot by steadfastly championing economic integration, and taking it even further by heading for monetary union? Could we not naively be “jumping from the frying pan into the fire”?
This series will briefly analyse, from and contemporary perspective, the history of the EAC, and circumstances under which it was formed during the colonial era; factors that ultimately led to its disintegration, and the lessons learned from this collapse.
The ensuing discussion delves broadly into fundamental factors that led to the EAC’s re-formation, and how this restoration process was initiated and conducted among the three countries (Kenya, Uganda and Tanzania).
Additionally, a general analysis of the foundation upon which the EAC has been re-launched will also be carried out taking into consideration factors like intra-regional trade among partner states, and impediments that currently exist, in their different forms and perspectives, to hamper progress. Finally, success that has been achieved thus far will be explicated and analysed, to understand what today augurs for tomorrow.
An understanding of the past will create unwavering ‘stability’ today, which will also create not only clearer purpose for tomorrow, but also guidance on how to get there.
Ultimately, if Rwanda and all other partner states would like to make considerable economic gains from the opportunities offered by a regional initiative to which they belong, clear knowledge and understanding – down to the grassroots – of the different aspects of this regional arrangement’s past and present is of utmost importance.
We all have high hopes in the EAC, but it is only fair to ask, the more reason we need to guard against retrogressive forces as far as integration initiatives are concerned.
The writer is a business development expert Rwanda Association of Local Government Authorities’ (RALGA) Local Government Consultants. He is also a member of Rwanda’s National Trade Policy Forum.
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Govt to create non-tax revenue body
Deputy minister for Finance Mwigulu Nchemba said yesterday the government is planning to form an independent authority specifically for collecting and administering non-tax revenues.
Speaking in Dar es Salaam during the official opening of the 3rd African Tax Administration Forum (ATAF) General Assembly Conference, Mr Nchemba said that non-tax revenues in the country are presently being collected by agents, something which makes it difficult to monitor all the collected monies.
“Agents are all over the country; they collect tax on behalf of the government, but they have been enriching themselves leaving municipalities in dire poverty. As the government, we plan to form an authority that will deal specifically with non-tax revenues,” said Mr Nchemba.
He said that the Tanzania Revenue Authority (TRA) has been doing a good job of collecting and administering different forms of tax.
“If such a body is formed to collect and administer non-tax revenues I am sure the government, specifically the municipal councils, will be able to obtain enough revenue they need to implement their development plans.” He insisted that it was mandatory for every Tanzanian to be tax compliant if the country is to attain significant social and economic development.
“We want to move from the tendency which has seen only a few rich middle income earners paying tax, which is then spent for the benefit of a large population that evade paying tax; we will ensure every person who is eligible to pay tax in this country pays,” he said.
Commissioners general and tax experts from 37 countries across the Continent are meeting in Tanzania to discuss, among the things, challenges of revenue systems and collection in the continent.
At the end, they will come up with effective ways to ensure tax systems tightened so that multilateral companies operating in Africa do pay tax accordingly.
“Multilateral companies have been very notorious in evading tax; they declare losses every now in Africa but the same companies declare profits in their mother companies, we want to come up with a strategy that will help us monitor them effectively and see to it that they pay tax accordingly,” said TRA Commissioner General Rished Bade.
He noted that transfer pricing, wasteful tax incentives, unfavourable tax treaties and tax fraud are key challenges which the continent needs to address jointly.
“It is very important for tax administrations to join hands with tax policy makers to jointly address the challenges we face.”
Meanwhile the Tanzanian Bureau of Standards (TBS) has introduced new three units to curb importation of fake products. The units are: Product Certification, Import Inspection-PvoC and Destination Inspection and Managing system Certification.
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South Africa and DRC need to industrialise to achieve 2030 visions
The Deputy Ambassador of South Africa to the Democratic Republic of Congo (DRC) Mr Andrew Maswanganye says South Africa and the DRC need to put more focus on their industrialisation efforts in order to achieve the goal of eradicating unemployment, inequality and poverty as set out in their respective 2030 visions. Maswanganye was speaking at a Trade and Investment Seminar that was hosted by the Department of Trade and Industry (the dti) in Kinshasa yesterday, as part of the Investment and Trade Initiative (ITI) to the DRC.
“South Africa and the DRC need to do more to improve cooperation in the field of economic development in order to achieve their shared vision of 2030 where unemployment, poverty and inequality will be forgotten nightmares. This calls for a greater need to industrialise our economies by utilising the natural and ecological resources, skills, technologies, and other development partnerships that we have. The economic report on Africa 2014 which was released by the United Nations Economic Commission for Africa (UNECA) says that industrialisation is key for Africa to foster structural transformation and improve in standards of living. Yet industrialisation has remained elusive with an embryonic manufacturing sector, low productivity and marginal participation in domestic and international market,” said Maswanganye quoting the UNECA report.
He said the report also indicated that while services have surpassed the agricultural industry as the leading income generators across Africa, this has not created quality and quantity of jobs likely to result from manufacturing, labour-intensive production. Industrialisation is thus a pre-condition for Africa to achieve its economic growth.
He explained that this was the reason why the 34th Summit of the Southern African Development Community (SADC) Heads of State and Government that took place in Zimbabwe last month, mandated the Ministerial Task Force on Regional Economic Integration to develop a strategy and a road map on industrialisation in the region. This, said Maswanganye, showed the importance of this critical intervention.
“The DRC government has prioritised industrialisation as the most important intervention to help put this country on the path to sustainable inclusive economic development. Development programmes that have been identified and shared with the SA government include the development of the Grand Inga Hydro Power complex which has the potential to be the hub of the DRC power generation industry, and which if fully exploited, can supply energy to as many as five million households across Africa,” he added.
Maswanganye expressed optimism that the redevelopment of the Congolese agriculture and agro-processing capacity through agro-industrial parks would help restore the significance of agriculture to its 1966 status when it used to account for the largest share of the country’s GDP.
“There is also the modernisation of the service sector by improving the regulatory climate and strengthening institutions of corporate governance, especially in areas such as ICT, financial services, retail and tourism in the DRC. This is where SA and DRC companies can partner in order to take advantage of these opportunities,” he said, adding that there was also a significant improvement in the transformation of the legal institutional framework governing the mining industry in the DRC.
Maswanganye added that the businesspeople from SA and the DRC attending seminar were faced with a massive number of opportunities that they could work together on and take advantage of in order to contribute to the industrialisation of the two countries.
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Africa’s response to the recently released proposals of the Global Ocean Commission
A half day workshop was jointly organized by the African Union Commission and the Global Ocean Commission on 15th September 2014, to reflect on the findings of the commission’s report, on the African Union’s agenda 2063 blue economy and African integrated maritime strategy 2050.
The workshops aimed to draw attention on Africa’s response to the report of the global ocean commission, following the launch of the Global Ocean Commission final report on 24th June 2014 in New York.
In his welcoming address on behalf of H.E. Dr. Nkosazana Dlamini Zuma, Chairperson of the African Union Commission, H.E Dr. Anthony Mothae Maruping, Commissioner Economic Affairs, recalled the importance of the 2050 - Africa’s Integrated Maritime Strategy 2050 (2050-AIM Strategy), adopted by the January 2014 Summit of the AU, which seeks to address the geostrategic and geopolitical issues and challenges faced by the maritime sector of the African continent.
He presented the program of the different issues to be discussed and the meeting objectives of the workshop. These include: the findings of the Global Ocean Commission Report; The African Union’s Agenda 2063, the Blue Economy and African integrated Maritime Strategy 2050: Forging Global Partnership toward Comment Objectives; Unlocking the full potential of African Ocean for global commerce, maritime affairs and international Security; Economic and social rationale for establishment of a Pan African Blue Ocean Institute; Collaborating for achieving greater synergies between the Global Ocean Commission and the three Pan African institutions (AfDB, the AUC and the UNECA) among others.
In his closing remarks the Executive Secretary of the Global Ocean Commission Mr. Simon Reddy, expressed the necessity of mapping the road ahead to promote the sustainable use of Africa’s ocean for the benefit of both current and future generations of Africans.
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Seychelles has concluded the last outstanding bilateral trade negotiations with the United States
In a press statement issued this afternoon, the Seychelles Ministry of Finance, Trade and Investment said the final bilateral agreement was signed in Geneva Switzerland, yesterday.
The Indian ocean archipelago’s Ambassador in Brussels, Vivianne Fock-Tave signed the agreement on behalf of the Seychelles government whilst Ambassador Michael Punke signed for the United States of America.
“With the signing of this last bilateral agreement Seychelles has now overcome the final hurdle toward accession, in what has been a lengthy and arduous, but nevertheless rewarding process,” read the statement.
“Seychelles will now host its 8th Working Party meeting in Geneva next month, which is expected to be the last, prior to formal acceptance into the organisation.”
Following the Seychelles’ sixth WTO Accession Working Party meeting in July, the Director-General of the Trade Division, in the Ministry of Finance, Trade and Investment, Cillia Mangroo told SNA that Seychelles is hopeful that it will join WTO in 2014.
“From our meetings with other countries and the WTO secretariat, it is a target that we can meet,” she said.
In today’s statement following the signing of the last bilateral agreement with the United States, the Ministry of Finance, Trade and Investment said Seychelles’ acceptance as a member of the WTO is expected to be made at the organisation’s Council meeting, to be held in December this year.
The process of becoming a WTO member is unique to each applicant country, but takes an average of about five years for most nations. The longest accession negotiation of a current member is currently that of Russia, which became a member of the WTO on 22 August 2012, 19 years after applying.
However, Seychelles is expected to surpass that record even if accession is granted by the end of the year.
Seychelles initially requested membership to the WTO on May 31, 1995, and made very little progress up until it re-initiated the process in 2008. One of the main challenges Seychelles faced was the limited expertise and experience within its national institutions in trade negotiations and in general and multilateral negotiations in particular.
For a small island developing state with a population of just over 90,000, the question as to whether Seychelles should join the organisation has been a contentious one in the past, particularly given the costs involved, such as the costs related to the accession process, the costs of preparing local stakeholders for trade in the globalized world, and the costs of ensuring that local businesses remain competitive.
Since 2008, the government made a significant amount of progress to identify the required legislative changes. By 2010, Seychelles had submitted offers in both Goods and Services, and also established a Working Party.
Before yesterday’s signing with the US, Seychelles had already completed bilateral trade negotiations with eight other WTO members that requested talks via Seychelles’ working party, namely Canada, the European Union, Japan, Mauritius, Oman, South Africa, Switzerland and Thailand.
The WTO’s membership currently stands at 160 member states, accounting for over 97 percent of the world’s total trade.
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World Export Development Forum opens in Kigali
Africa should focus on greater local value addition to the continent’s assets in agri-food, manufacturing as well as services to help propel its economy, the International Trade Centre (ITC), Executive Director Arancha Gonzalez said on Tuesday at the opening of the World Export Development Forum.
“While businesses in Africa were until recently focused on the extractive sector; today the biggest opportunities lie in greater local value addition to Africa’s assets in agri-food, manufacturing and more and more in services: ICT, health, tourism, education services are crucial for many of African smaller, landlocked countries such as Rwanda,” she said.
Noting that Africa is already the global marketplace of the future, Gonzalez said it is now about turning local value addition into more jobs, sustained growth, and a more inclusive development.
It is about trading these products and services in international markets, beginning with the markets in the region, she told the gathering.
She spoke about partnerships between policy makers and business, and international development partners and local governments and between global private sector actors and African Small and medium enterprises (SMEs) being central.
She also stressed the importance of SMEs in job creation and the need to address the challenges facing SMEs.
“We must also explore innovative ways to tackle the lack of finance that frustrates the growth prospects of many SMEs in Africa, not least by tapping into impact investment funds. We need to build on the nascent successes of SME incubators, particularly in the technology sector,” she said.
It is projected that by 2030, the world will need to generate an additional 500 million jobs to keep up with growth in the world’s working-age population.
“This is why SMEs figure at the heart of ITC’s work. We know the impact that successful SMEs have on job creation in developing countries. In Africa alone there are over 50 million micro, small, and medium-sized enterprises, which employ close to 60% of the workforce,” she said.
Rwanda president Paul Kagame has called on African nations to invest massively in human capital in order to build competitive and modern economy.
“Building a competitive and modern economy requires smart investments in human capital and productive knowledge. Nations should aim at finding a competitive edge and “never give up” development efforts,” he said.
Kagame noted that there is no country so isolated, disadvantaged that it can’t find a competitive edge in the global economy
The two-day event dubbed “SMEs: Creating jobs through trade” reflects the important role a vibrant private sector plays in driving trade-led growth and development.
It will also explore how SMEs can become and remain competitive by addressing issues that impact their entrepreneurial capacity and their operating environment. More than 800 delegates from 73 countries are attending the event.
Rwanda was ranked as the 3rd most competitive country for business in Africa in the World Economic Forum’s 2013-2014 Global Competitiveness Index Report.
In the World Bank’s Doing Business 2014 report, the small East African nation was ranked 32nd out of 189 countries for ease of doing business, up from the 52nd place previously.
Click here to view the WEDF 2014 Opening session report.
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New initiative to boost women entrepreneurs
The International Trade Centre (ITC) has launched a new initiative expected to push for increased participation of women entrepreneurs in public procurement.
The initiative is hoped will cut down on the dominance of men, who, participants at the Roundtable of the Global Platform on Sourcing from Women Vendors noted, earn the majority of public contracts.
The Global Platform on Sourcing from Women Vendors was organised, yesterday, on the sidelines of the World Export Development Forum that is underway in Kigali.
According to ITC, currently only an estimated one per cent of public-procurement contracts globally are awarded to women entrepreneurs.
Announcing the new initiative, ITC Executive Director Arancha Gonzalez, noted that whereas the number of women entrepreneurs is growing, only a very small fraction were benefitting from public-procurement contracts.
“Women account for half the world’s population and have a concrete role to play in economic development. We can collectively improve the one per cent of the public procurement that finds its way to women-owned businesses,” she said.
The announcement was accompanied with a handbook titled, “Empowering women through public Procurement,” with guidelines for governments on how to facilitate women entrepreneurs.
“It will be a major improvement if three, four or five per cent of public contracts went to women entrepreneurs in the short run. We are calling for a fairer system in which women have a better chance of bidding for public tenders,” Gonzalez said.
Oda Gasinzigwa, the minister for gender and family promotion, welcomed the initiative, saying this was a tool that will help propel Rwanda to its next level of women empowerment.
“In Rwanda, existing gender sensitive laws and regulations offer a unique fiscal responsible route to empower women, including public procurement. But we too have some way to go, and this initiative is much welcomed,” she said.
“It will help combat poverty and promote inclusive economic growth. It will help increase the participation of women-owned businesses, not only in public procurement but also in public decision making.”
Uganda’s Minister for Trade Amelia Kyambadde also committed to implementing the initiative in her country.
Background
Established in September 2010, the ITC led Global Platform for Action on Sourcing from Women Vendors is a 10-year initiative that aims to increase the amount of corporate, government and institutional procurement secured by women vendors for the ultimate purpose of bringing economic benefit to women and their communities.
The Women Vendors Exhibition and Forum 2014 (WVEF 2014) takes place on 15-17 September in Kigali Rwanda in parallel with ITC’s World Export Development Forum (WEDF). This year the event features two sectors: coffee and services.
ITC is the joint agency of the World Trade Organization and the United Nations. ITC assists small and medium-sized enterprises in developing and transition economies to become more competitive in global markets, thereby contributing to sustainable economic development within the frameworks of the Aid for Trade agenda and the Millennium Development Goals.
The RDB was set up by bringing together all the government agencies responsible for the entire investor experience under one roof. This includes key agencies responsible for business registration, investment promotion, environmental clearances, privatization and specialist agencies which support the priority sectors of ICT and tourism as well as SMEs and human capacity development in the private sector.
Read the Press Release here: ITC urges governments to increase public procurement from women vendors
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Governing body of UNCTAD addresses tackling inequality through trade and development
UNCTAD Secretary-General Mukhisa Kituyi, speaking on the opening afternoon of the sixty-first session of the UNCTAD Trade and Development Board on 15 September said: “Today there truly is a broad realization by society as a whole that unsustainable economic practices leading to the over-accumulation of wealth are not only unfair, but can bring stagnation and conflict”.
Dr. Kituyi was addressing global inequality and how it can be tackled by the global development agenda that will replace the Millennium Development Goals at the end of 2015.
“The current proposal for the sustainable development goals, which will soon be taken up by United Nations Members in New York, also reflect this realization with proposed Goal 10 on reducing inequality within and among countries by 2030,” he said.
The Trade and Development Board – which oversees UNCTAD operations from year to year – opened its sixty-first session (15-26 September) with the election of Ambassador Ana Maria Menéndez Pérez of Spain as its new president.
The Board’s deliberations included presentations by Rob Davies, Minister of Trade and Industry of South Africa, Giovanni Andrea Cornia of the University of Florence and Sangheon Lee, senior economist at the International Labour Organization.
Mr. Davies said that inequality between and within developed and developing countries could be tackled by restructuring global economic relationships to allow for active policies for inclusive growth on the part of developing countries in Africa and elsewhere.
Dr. Kituyi said: “The new global economy has brought with it both immense hopes but equally immense inequities. [In the last 50 years] we have seen promising declines in inequality between countries as some developing countries have experienced strong growth and have begun to close the gap between themselves and the richest countries. But compared to 50 years ago, today inequality within countries has risen in a startling number of countries – both rich and poor.”
Earlier, Dr. Kituyi told the Trade and Development Board that he welcomed the fact that the emerging post-2015 agenda was likely to include trade as a means of achieving the sustainable development goals.
Dr. Kituyi emphasized that UNCTAD was as such well placed to make a contribution to the “ambitious and transformative” new agenda: “Our research can offer the facts needed to overcome differences, our consensus-building can facilitate dialogue and our technical cooperation can help us to work together to build capacities, particularly in support of the most vulnerable countries.”
This sixty-first session of the Trade and Development Board comes at the mid-point between UNCTAD’s most recent ministerial conference in Doha in 2012 and its next, to be held in Lima in 2016. That meeting, noted Ms. Menéndez Pérez, will be among the first international gatherings after the planned adoption of the post-2015 development agenda.
It will be essential for UNCTAD to be “poised to act” on the new development agenda in Lima, Dr. Kituyi added. Toward this end, Dr. Kituyi outlined reforms he had taken in his first year in office to ensure that UNCTAD remains fit for purpose.
Additional topics to be debated at the Trade and Development Board session include economic interdependence, development strategies in a globalized world, investment for development, the evolution of the international trading system, economic development in Africa, efforts to help the least developed countries and UNCTAD assistance to the Palestinian people.
In handing over the gavel to Ms. Menéndez Pérez, the outgoing Trade and Development Board President, Ambassador Triyono Wibowo of Indonesia, said that his presidency had been “one of the most satisfying experiences” of his professional life. As well as paying tribute to the UNCTAD secretariat, Mr. Wibowo appealed for more active involvement by member States in the deliberations of UNCTAD, which, after all, represent the collective development aspirations of humanity.
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Differences in EAC states’ customs systems impede progress
Two months since implementation, differences in custom systems across East African Community (EAC) partner states are reported to be undermining the region’s single window system (SWS).
Instated on July 1 this year, the Single Customs Territory (SCT) was ideally meant to ease trade and transport across the EAC borders, explains Acting Tanzania Revenue Authority (TRA) Manager of the Customs Unit Robert Nyoni.
Speaking to journalists over the weekend in Dar es Salaam he said it was envisioned that the SCT would among other things, standardise logistics at the single entry point where all import, export and transit-related regulatory requirements would be attended to.
“Since through the SCT information is shared electronically, then individual data elements would be submitted only once,” he explained.
“This way, the SCT spearheads the attainment of the much sought Customs Union and removal of duties and other restrictive regulations,” he added.
“It is meant to minimise internal border customs’ control on goods moving among Partner States towards the ultimate realisation of free circulation of goods,” he went on to say.
“However, differences in custom systems across the EAC are impeding the implementation,” he decried.
As an example he said, in Tanzania the country has implemented the Tanzania Customs Integrated System (TANCIS) but Burundi, Rwanda and Uganda use the Automated System for Customs Data (ASYCUDA) while Kenya uses the Simba system.
Nyoni reiterated that, while the ASYCUDA system is foreign based, TANCIS is a Tanzanian made system that allows integration of various sectors within a single sophisticated electronic system.
He went on to announce that TANCIS is to be rolled out in Tunduma and Zanzibar later this year where it is expected to arrest custom challenges.
“I suggest that member states adapt the TANCIS system to increase efficiency and cost savings in obtaining relevant clearance and permit(s) for moving cargo across borders,” he said.
On his part, the TRA Customs and Excise Deputy Commissioner, Patrick Kisaka, told journalists that the government plans to install four new one-stop border posts.
“The single custom state border will increase our capacity to control revenue collection,” he said.
“Cargo would be charged tax and released only after the required tax is paid at the respective country of origin,” he explained.
He also challenged state public authorities like the Tanzania Bureau of Standard (TBS), Tanzania Food and Drugs Authority (TFDA) and Tanzania Atomic Energy Commission (TAEC) and Tanzania Minerals Audit Agency (TMAA) to subscribe to the system.
“This will facilitate trade and effective implementation of the single custom union,” he noted.
“There would be no need for business people to physically visit government authorities but instead, they would use the web-based system,” he went on to explain.
In June this year, TRA said the East African Single Customs Territory (SCT) would commence as scheduled on July 1, 2014.
The TRA Commissioner General, Rished Bade said TRA is working on concerns raised by various stakeholders in relation to use of the new system and emphasised that the business community will benefit from the resulting seamless flow of goods in the region.
“The SCT is beneficial to all stakeholders because it will lower clearance costs of goods within the region by eliminating duplication because clearance procedures (declaration, collection and verification) will be done at the point of entry,” he said.
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Uganda to invest $20b into oil
Oil industry top officials believe that Uganda must look for between $15 billion to $20 billion if it wants to become an oil producing country.
Jimmy Mugerwa the Tullow Uganda Country Manager said the total investments required for Uganda’s oil to come out of the soil is approximately $20 billion, which is almost the country’s GDP.
“We have now concluded the exploration phase. We expect this development phase to take another three years that’s if the production licenses are issued fast enough. We expect the total investments required for the entire oil sector to be around $15 billion to $20 billion,” Mugerwa said, while addressing the 19th Institute of Certified Public Accountants of Uganda (ICPAU) Annual Seminar at the Imperial Resort Beach Hotel in Entebbe.
He said the investments will include among others, the setting up of an oil refinery, building of the world’s longest continuously heated and insulated 24 inch crude oil export pipeline, land acquisitions, the oil project will require more than 250MW of power when in full operations to heat the over 1400KM crude oil pipeline and over 1200 heavy duty trucks to transport over 800,000 tons of steel, pipes and other logistics.
The investments will also see the setting up of an international airport in Hoima for both passenger and cargo planes and various road networks.
Mugerwa who addressed accountants about opportunities in Uganda’s oil and gas industry said some of the key challenges facing the sector are the large upfront investments, environmentally and socially sensitive areas where the pipeline route will pass, cross border complexities, the heating of the pipeline which will be very expensive and the different tax regimes with in the EAC.
“Oil companies are expected to take their final Financial Investment Decisions (FIDs) in December 2015. If they finally agree to invest, it will take another three years in the procurement of infrastructure and engineers. This means that even 2019 oil production dates may be ambitious,” Mugerwa told the over 1000 accountants.
He asked accountants to position themselves as investors because when the project finally takes off, the sector will require 170,000 cover rolls, safety boots and glasses.
He said they will also require buses to transport workers to the oil region, over 200,000 tons of cement, iron bars and 1200 heavy duty trucks.
“We shall need 1200 trucks to transport over 800,000 tons of pipes and steel from Mombasa for the pipeline and refinery. Accountants can go into PPP arrangements to take up such opportunities. Am I seeing investors in the room,” he asked.
The Institute of Certified Public Accountants of Uganda organizes the seminar yearly to help members familiarize themselves with various opportunities and aspects surrounding them.
Mugerwa said Uganda can reap over $63.5 billion from the 75% oil sharing agreement arrangement over a 25 year period. This will mean that on average, the government will earn $3.6 billion every year.
It is also expected that the total net revenues will hit $96b over the 25 years period.
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Canada-Africa 2014 Business Summit opens in Toronto
The first ever Canada-Africa Business Summit opened on Monday (September 15) in Toronto, Ontario.
The meeting focused on ways to explore Africa’s investment and business opportunities in areas including education, financial and insurance services, information and communications technologies, infrastructure, mining, and transportation. It also offers government officials, business communities, investors and other stakeholders from Africa and Canada an opportunity to exchange views on ways to fill the finance gap, explore key areas of investment, elevate the existing business and investment ties of Africa and Canada into a new and higher level, improve the efficiency of resource use through management of risk as well as find areas for a mutually beneficial cooperative partnership in legal, financial, operational, technical, institutional and human developments. Opening the Summit, Nola Kianza, Founder and Director of the Canadian Council on Africa, stressed that Africa was no longer a place where trouble, aid and disease preoccupied the minds of people. He said this first Business Summit highlighted the need for comprehensive partnership between Africa and Canada to secure a better tomorrow.
Canadian Senator, Don Meredith, expressed his hope that the Summit would showcase the untapped investment opportunities created in Africa for Canadian business firms. He said the engagement of Canadian investors would inject new impetus for poverty alleviation efforts and create enabling conditions for a more comprehensive and closer cooperation between African countries and Canada. He further underscored that the Canadian economic diplomacy would be a major driving force in deepening and cementing the business and investment ties of Africa and Canada and improves the future prospects and aspirations of young populations. The Senator noted the Summit had identified Ethiopia as one of four African Countries of Focus, adding that Ethiopia had become an embodiment of business and investment opportunities endowed with a trainable and young population.
He said the Government of Canada was committed to encourage and support Canadian firms to invest and benefit in Africa. Ethiopia’s Speaker of the House of Federation, Kassa Tekle-Berhan, said the Summit was a testimony to the collective desire and determination to broaden and strengthen Canada- Africa relations for the betterment of the two peoples. He emphasized that sound and well-crafted policies and strategies coupled with the determination of the people and the commitment of the Government had made Ethiopia a preferred destination for international FDI inflows in light manufacturing and agriculture. He said this Summit would help both Canada and Ethiopia advance their converging interests.
After the opening session, panel discussions, question and answer sessions and consultations considered Ethiopia as a Country of Focus. “Doing Business in Ethiopia,” and networking events, as well as a documentary “Ethiopia: the Promising Future” featured in the programme. The Summit was organized by the Canadian Council on Africa (CCAfrica), in association with the Government of Canada and the World Bank Group, bringing together nearly 1,000 business people and representatives of African and Canadian governments. It offers in-depth discussions, panels, plenary sessions and workshops on issues centered on business, investment and trade ties between Canada and Africa.