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Kenya told to review bilateral trade agreements
Former Trade Minister Dr Mukhisa Kituyi has urged the government to consider renegotiating decades-old bilateral agreements, arguing that they favour foreign investors at the expense of locals.
Dr Kituyi said Kenya needs to take a decisive position on ancient trade agreements that favour foreign investors over local investors.
Dr Kituyi currently heads the United Nations Conference on Trade and Development (UNCTAD).
“In some sectors, investors still enjoy zero-rated incentives that allow them to import items for free only to 'ship’ home their entire profits to tax havens.
“For instance, hotels import items duty-free only to ship out profits to tax havens because they say taxing them here is double-invoicing and against the signed agreements. Kenya must look at this issue as a revenue resource for its is mature enough with homemade equity firms that can invest in such industries and pay tax,” he said.
Lauding the government move on continued investment in infrastructural projects, Dr Kituyi said the gains made could best be realized if the country empowered its nascent industries to venture into mass production of key raw materials used in the manufacture of goods.
Dr Kituyi made the remarks during a trade facilitation seminar in Nakuru over the weekend.
He added that there is an urgent need to look at the national good in implementation of major projects instead of pushing for further decentralization of funds.
He said countries like South Africa had gone full-blown in throwing out decades-old agreements that favoured foreign investors thereby enabling it rethink the agreements in a way that favours local industries.
“If such a foreign company goes to the International Disputes and Arbitration Court to file a dispute, it is the Kenya taxpayer who is forced to settle the claim since as per the agreement, Kenya allowed investors to ‘ship’ out profits tax-free,” he said.
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Burundi rolls out new cargo tracking system
Burundi has started trials for electronic tracking of cargo on transit in a bid to prevent dumping of goods for which no taxes have been paid into the local market.
Burundi Revenue Authority (OBR) Director in charge of Customs, Border and Ports Leonce Niyonzima said the Electronic Cargo Tracking System (ECTS) will protect local industries and jobs.
“We all know that there are always non-tarrif barriers which hinders the free movement of goods in the country, but with the electronic cargo tracking system we will be able to limit the number of times trucks are stopped for checking,” he said.
Mr Leonce said the new system will reduce the time goods spend on transit while checking dumping and deviation of goods from their final destination.
With the Single Customs Territory requiring importers to pay excise tax duty in their respective country of destination before they clear their goods at the port of entry, the ECTS will complement efforts to counter unfair competition in the region.
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SEC links $140bn illicit financial flows to lack of integrity
The $140 billion lost by Nigeria to illicit financial flows has been linked to lack of integrity and transparency among business organisations and government institutions.
Nigeria has lost more to illicit financial flows particularly between 2002 and 2011 than any other African country. It is listed as one of the top 10 globally in this ranking.
“Some people estimate that we need about $50 billion to ensure stable electricity, yet within nine-year period we lost $140 billion to illicit financial flows”, said Arunma Oteh, director general, Securities and Exchange Commission (SEC).
Oteh, who spoke at the 2nd annual Christopher Kolade Lecture on business integrity in Lagos, regretted that these illicit flows not only deprive the country of desperately debt capital but also being used to finance terrorism abroad and within Nigeria.
“Many companies have paid dearly for negating integrity and for not paying attention to it”. Using Halliburton as one of the examples of companies that have suffered losses due to lack of integrity, she said the company has suffered bans from government countries following various bribery scandals.
According to her, Nigeria ranked 132 out of 144 countries on a recently conducted study on ethical behaviours of firms. Meanwhile, South Africa ranked 35, China 55, India 58, while Brazil ranked 107.
She said Nigeria only performed better than two countries, Venezuela and Argentina, in diversion of public fund while the recently World Economic Forum (WEF) global competitiveness result for 2014/2015 period ranked Nigeria 127 out 147 countries.
SEC DG was concerned that with above result there is urgent need to focus on integrity while doing business in Nigeria.
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Dar gets Sh50b funding to compete with Mombasa port
Tanzania signed a $565 million deal on Friday with the World Bank and other development partners to expand its main port of Dar es Salaam, part of plans to boost its role as a regional trade hub. Tanzania wants to lift capacity to 28 million tonnes a year by 2020 from the 14.6 million tonnes it handled in the financial year 2013/14. The World Bank said in May that inefficiencies at the port cost Tanzania and neighbours up to $2.6 billion (Sh230 billion) a year.
The port, whose main rival is the bigger but also congested port of Mombasa in Kenya, acts as a trade gateway for landlocked states such as Zambia, Rwanda, Malawi, Burundi and Uganda, as well as the eastern region of Democratic Republic of the Congo.
World Bank Group managing director Sri Mulyani Indrawati advised Tanzania to invite private sector participation in major infrastructure projects, but said that should be done with transparency and with proper regulations in place. “It’s not only that all these investments should be done by the public sector – inviting more private sector participation can provide more investments,” she said at a news conference after the signing of the port financing agreement.
Tanzania’s Transport Minister Harrison Mwakyembe said investments in infrastructure projects would have a direct impact on creating much-needed jobs and expanding trade in East Africa. “The Dar es Salaam port handles about 90 percent of Tanzania’s trade, but port delays have been worsened by limitations in operational efficiency. We believe that this programme will turn around the port,” he said.
The World Bank teamed up with Britain’s Department for International Development (DFID) and Trade Mark East Africa, an organisation that aims to help regional integration. The estimated $565 million cost would come from loans and grants, the World Bank said.
Tanzania, like its neighbour Kenya, wants to capitalise on a long coastline and upgrade existing rickety railways and roads to serve growing economies in the heart of Africa. “Future growth of the economy depends on the port’s ability to improve, to become more efficient and to be able to handle more trade,” said Ros Cooper, acting head of DFID Tanzania.
The Dar es Salaam port handles $15 billion worth of goods a year, equivalent to 60 per cent of Tanzania’s GDP in 2012. Tanzania’s economy has been growing at a sturdy 7 percent a year, but analysts say poor infrastructure is a bottleneck.
Background
The cooperation will be delivered through the Dar es Salaam Maritime Gateway Project and includes the provision of financial support to facilitate the deepening and strengthening of berths 1-7, the dredging of the entrance channel and turning basin in the port, the construction of a new berth and roll on – roll off terminal, and improvements in the spatial efficiency and operational effectiveness of the Port of Dar es Salaam.
The overall objective of the co-operation is to support the Tanzania Ports Authority (TPA) to realize the objectives of the Government of the United Republic of Tanzania for the maritime sub-sector, as expressed in the Big Results Now (BRN) Initiative, Part of Tanzania Vision 2025, and increase the capacity of the port to 28 million tons by 2020 from current 14.6 million tons handled in 2013/14.
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Mozambique close to implementing customs exemption as part of SADC
Mozambique is expected in 2015 to conclude its implementation of customs tariff exemptions as part of the process to build a free trade zone in the Southern African Development Community (SADC), said the Director General of Customs, Guilherme Mambo.
The SADC free trade zone is part of efforts made by member countries for greater regional economic integration, which sets targets including such as a Customs Union, a Common Market as well as creation of a Monetary Union, ahead of a regional central bank and single currency.
The Director General of Customs told Mozambican daily newspaper Notícias, that Mozambique is on schedule for the removal of customs barriers, and the only barriers that have yet to come down are with South Africa, “because for the remaining members we have already completed the process . ”
The Director General of Customs was speaking in Maputo on the sidelines of a meeting on the introduction of trade facilities and coordinated border management, which brought together senior Mozambique Tax Authority officials and from other public and private institutions involved in the international trade process.
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Productive jobs necessary for Tanzania’s fast-growing workforce
With more than 800,000 job seekers entering Tanzania’s labor market each year, the country must transform itself from a labor force of unproductive jobs to one of more productive industries, according to the new World Bank Group (WBG) study.
The new country economic memorandum, Tanzania: Productive Jobs Wanted, highlights the importance of productive job creation, particularly in light of rapid urbanization and a labor force that will double by 2030. In rural areas, jobs are currently confined to farms, which are on average five times less productive than farms in other areas of the world, according to the study. In cities, the study notes that entrepreneurs are more focused on survival than growing their businesses. At the same time, Tanzania faces three main challenges to job creation; high poverty levels, a mostly young population, and people moving from rural areas to urban centers.
“Jobs, productive jobs, have to be created with a sense of urgency. Inaction is not an option for the country.”
Jacques Morisset
“The growth of productive jobs is vital for alleviating poverty and promoting shared prosperity, two important goals of Tanzania’s economic strategy,” said Jacques Morisset, WBG economist for Tanzania and one of the authors of the report. “Jobs, productive jobs, have to be created with a sense of urgency. Inaction is not an option for the country.”
The proposed plan identifies three key pillars to address the challenge of job creation; a focus on farms, on small non-farm businesses, and on business expansion into new markets such as the leather industry, high-value vegetables for arms and tourism for exporting services. For each of the three pillars, specific actions have been identified to create a climate for businesses to thrive and generate productive jobs. Key recommendations include:
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Build small business owners’ assets by promoting the development of skills and fixed capital
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Encourage urban mobility by reducing congestion costs in cities, which can absorb as much as a third of the income collected by a typical worker in Dar es Salaam
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Reduce the amount of resources spent by small firms on administrative and security costs so they can reallocate these resources to productive activities
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Create economies of scale to reduce operating costs by using external sources of labor of financing, and creating opportunities for cooperation
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Move firms out of the informality trap by providing incentives to potential exporters to formalize activities
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Enhance quality at production
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Improve connectivity and market access through improvements in hard and soft infrastructure and through the use of special economic zones
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Think regionally to promote exports given their contribution to employment over the past few years
This study is the culmination of 18 months of forums, business meetings, workshops and focused discussions in Tanzania and abroad with various formal and informal business owners, foreign investors, government ministries, policy makers and experts from the WBG and academia. The goal of the study is to contribute to the debate around job creation by proposing a direction for policy-making.
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‘Tight conditions hinder EA labour move’
Allowing only highly skilled workers, exorbitant work permit fees and the tedious process of documentation are part of the restrictive conditions stifling free movement of labour within the East African bloc, according to a new study report.
The study, carried out by the Southern and Eastern African Trade, Information and Negotiations Institute (SEATINI) Uganda, shows unemployment will remain high in the region unless member states create an environment that allows employment of the majority jobless youth who are not highly educated.
For instance, the research points out Article 10 (13) of the Common Market Protocol (CMP) which provides for only free movement of highly skilled workers such as corporate managers and science engineers, among others.
“…Contrary to popular assumptions, the free movement of workers under the CMP is not a right of all workers in East Africa but a privilege of only a few skilled workers,” reads the report entitled: Free Movement of Workers in East Africa: Implications on Youth Employment in Uganda.
According to the study, Kenya can only allow a person to seek employment in the country when he/she is above 35 years, which locks out majority of the youth.
The report analysed the free movement of workers in the East African Community, mainly focusing on its implications for youth employment in Uganda.
It involved private sectors, trade unions and government institutions to draw opinions.
Speaking at the launch of the findings in Kampala on Thursday, Mr Martin Wandera, the report author, said Ugandans are more likely to lose out in the EAC partnership if government fails to make necessary strategies.
“Uganda has many push factors compelling labour outflow, which is already attracting brain drain.Government needs to repossess some of the privatised state corporations to create jobs for youths,” Mr Wandera said.
Ms Jane Nalunga, SEATINI Uganda country director, said the region should reduce high levels of jobless growth, exporting jobs and an unfavourable legislative environment.
Read the Press statement for the launch of FMW Report from SEATINI Uganda here.
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Zimbabwe tightens taxation to prop up failing economy
Zimbabwean Finance Minister Patrick Chinamasa on Thursday unveiled new individual and commercial tax measures as the government increasingly turns to taxation to prop up falling revenues and a declining economy.
Due to poor performance in key sectors of the economy, Zimbabwe’s economic growth forecast in 2014 has been cut to 3.1 percent from the initial 6.1 percent.
While agriculture, the mainstay of the economy had recorded positive growth in the first half of 2014, the minister noted that this growth would be insufficient to offset poor performance in such sectors as mining that were now expected to register negative growth, down from 10.7 percent initially forecast.
Presenting his mid-term fiscal policy review statement Thursday (download below), the minister said the slowdown in the economy was being reflected in reduced revenue collections and depressed exports and imports.
In the six months to June, the government missed its revenue targets by 6.1 percent after it collected 1.735 billion dollars against a target of 1.847 billion dollars.
Exports during the period stood at 1.2 billion dollars against imports of 3 billion dollars, resulting in a trade deficit of 1.8 billion dollars compared to 2.4 billion dollars over the same period in 2013.
The minister bemoaned that the influx of nonessential imported goods, most of which were being manufactured locally, continued to undermine growth of the agricultural sector and recovery in the local industry. Manufacturing capacity utilization is projected to decline to 30 percent in 2014, down from more than 50 percent in 2011.
The minister therefore raised duties on some imported products including poultry, beverages, dairy produce and vegetables.
To enhance government revenue, the minister proposed a number of measures that include taxing fringe benefits of employees and increasing by 0.5 U.S. cents excise duty on fuel with effect from next week.
The minister also introduced a five percent duty on airtime for both voice and data from next week and a 25 percent customs duty on imported mobile handsets with effect from next month.
Chinamasa proposed limited amnesty to all taxpayers who disclose their tax obligations from 2009 to the end of this month within a period of six months and also pay within a period of six months.
The amnesty takes effect at the beginning of next month. The amnesty comes as many Zimbabwe businesses are reportedly evading paying corporate tax due to the harsh macro-economic environment prevailing in the country.
To boost viability in the gold mining sector that is threatened with low international prices, the minister reduced royalty by big gold miners to 5 percent from 7 percent, and scrapped presumptive tax by small scale gold producers.
Meanwhile, the central bank governor John Mangudya told journalists in an interview after presentation of the fiscal policy statement that the measures announced by the minister would boost confidence in the economy as well as production in the mining and manufacturing sectors.
The import duties were also necessary to contain unnecessary products coming into Zimbabwe and this would promote food production in the country, the central bank governor said.
He also commended reduction in gold royalties as a positive move that will boost gold production.
On new tax measures, the central bank governor said these were necessary to keep the government and economy running.
“Tax measures, as usual, are necessary to increase government revenue. We need to increase taxation at the moment because it is necessary to ensure government can balance its books,” he said.
The new tax measures, in a country ranked among the most highly taxed in the world, are set to further put a strain on the majority of Zimbabweans who are struggling to make ends meet in the poor performing economy.
The increase in fuel excise duty, in particular, will have ripple effects in the economy as prices of most basic commodities will go up as a result of the increase in transport costs.
In an effort to normalize relations with international creditors, Chinamasa said the Zimbabwe government had started making token payments towards servicing its debts to multilateral creditors.
He said token amounts of 900,000 U.S. dollars, 1.8 million U.S. dollars and 1 million U.S. dollars had been paid to the IMF, World Bank and the African Development Bank during the first six months of this year.
Zimbabwe’s total external debt now stands at 8.8 billion U.S. dollars, including 121 million U.S. dollars owed to the IMF and 314 million U.S. dollars to the European Investment Bank.
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WTO members return to Geneva, hoping to bridge TFA gap
A flurry of meetings is scheduled for the coming weeks as WTO members – having now returned to Geneva following their annual August break – try to pick up the pieces after missing a key implementation deadline this past July.
The 31 July missed deadline was for adopting a “Protocol of Amendment,” which would have incorporated the WTO’s new Trade Facilitation Agreement, or TFA, into the global trade body’s legal framework. The step is crucial in order to allow WTO members to take the trade deal – agreed in Bali, Indonesia in December 2013 – back to their domestic legislatures for ratification, particularly given the end-July 2015 deadline to bring the deal into force.
The process of adopting this Protocol had stumbled after India said that it would not be able to allow TFA to move forward unless it saw signs of movement toward a “permanent solution” on the issue of public food stockholding, another issue from the Bali 2013 meeting.
An “interim solution” on the latter subject was adopted in Bali, effectively committing members to refrain from challenging subsidised purchases of farm goods under public food stockholding schemes, in return for more information on the scale and type of support being given to farmers.
The interim solution is set to last until at least 2017, in order to give members time to negotiate a permanent solution. However, India had asked in July to see a permanent solution by 31 December 2014, and refused to back the TFA Protocol without it.
The prospect of re-negotiating the Bali timelines – and thus potentially re-opening the hard-won deal – was deemed untenable for many WTO members, with the US being among the most vocal in this regard.
“We have not been able to find a solution that would allow us to bridge that gap,” WTO Director-General Roberto Azevêdo said shortly before midnight on 31 July, when it was clear that meeting the Protocol deadline was no longer possible.
“This will have consequences,” he warned at the time. “And it seems to me, from what I hear in my conversations with you, that the consequences are likely to be significant.”
Informal HoDs meeting next Monday
Before WTO members adjourned for the August break, the Director-General urged them to use the holiday as an opportunity to “think carefully” about potential next steps, asking them to “reflect long and hard on the ramifications of this setback.”
Negotiating group chairs, along with those of the regular WTO bodies, would also be directed to consult with members on what to do next, he said.
Little seems to have happened over the summer, sources indicated recently, with some noting that both sides appear to be awaiting the other’s next move. “It’s still a bit early,” one delegate acknowledged.
Since WTO members returned to Geneva earlier this month, ambassadors have reportedly been meeting one another in small groups to discuss the situation further.
All WTO members are then set to meet next Monday, 15 September for a meeting at the level of Heads of Delegations (HoDs), which is expected to serve as an opportunity to kick off the consultations process and review any discussions that have been held, informally or otherwise, over the August break.
The following day, an informal meeting of the Committee on Agriculture is scheduled, with sources confirming that the chair’s goal for those discussions is to “take stock of members’ positions on the implementation of the Bali outcomes and to exchange views on the way ahead.”
The “special session” of the Committee on Agriculture, which specifically deals with agriculture-related negotiations, is then set to meet the following Tuesday on 23 September, with the same stated purpose.
On 29 September, the Preparatory Committee on Trade Facilitation will then meet. While the same stocktaking exercise is planned informally, the meeting will also formally review the notifications that developing country members have sent in of their Category A commitments – in other words, those commitments that will take effect once the TFA does enter into force.
Trade sources say that 32 new notifications on Category A commitments have been received since the last meeting of the Preparatory Committee, which was held in early July.
Some sources have indicated that special sessions on all other negotiating issues could be forthcoming, and that the Trade Negotiations Committee – tasked with the Doha Round trade talks – may meet in early October, ahead of the scheduled General Council meeting later that same month.
Chair’s statement versus General Council decision
In the weeks since the 31 July deadline passed, more details have emerged about how close members actually were to a deal that day.
The difference, sources say, was between whether to adopt a chair’s statement, versus a formal General Council decision on the public food stockholding subject. While the US had wanted the former, unwilling to adopt anything that might potentially reopen the Bali deal, India had sought the latter, which ostensibly would have carried more legal weight.
Sources say that negotiators had also explored options for a clear process for moving towards a permanent solution. Dates for meetings of the Committee on Agriculture and specific topics had been mooted as part of a possible deal.
Meanwhile, the US had also effectively clarified that the interim agreement announced in Bali would be effectively “open-ended.” The issue had been “fudged” through constructive ambiguity at the Bali conference, leaving open the question of whether the interim solution was temporary – and thus with a 2017 expiration date – or if it would last for however long it takes to reach a permanent solution.
Meeting at the White House
One potentially pivotal event on the international trade calendar is a planned meeting on 29-30 September in Washington between new Indian Prime Minister Narendra Modi, who took office in late May, and US President Barack Obama.
According to a White House statement on the event, the two leaders will discuss “a range of issues of mutual interest,” such as ways to ramp up economic growth and improve cooperation on security issues.
Sources speaking to Bridges noted that some members are pinning their hopes on the leaders’ meeting as a chance to resolve the stalemate. Others, however, have questioned whether the WTO issue is likely be given priority within the much more wide-ranging agenda that the two leaders are set to address.
Work programme timeline
What effect the TFA situation will have on another key WTO front – that of preparing a work programme aimed at resolving the various outstanding issues in the Doha Round talks – is another significant question for negotiators as they resume their work.
Trade ministers had agreed in Bali that this work programme should be agreed by December of this year, and would build both on the decisions taken during last year’s conference as well as the other issues “under the Doha mandate that are central to concluding the Round.”
Furthermore, ministers said at the time, those issues in the Bali deal where legally binding outcomes were not possible must take priority, while work on issues not addressed during the end-2013 event would need to resume in the relevant WTO committees or negotiating groups.
However, various WTO members, particularly the US and EU, have made clear that unless the Bali deal is implemented, there is no point in trying to craft a post-Bali agenda.
“Many members, including developing country members, have noted that, if the Bali package fails, there can be no post-Bali,” said US Ambassador Michael Punke in July. “It is with regret that we agree with them.”
Whether these issues can be resolved in time to meet the upcoming deadlines is an open question, and has fuelled much speculation and commentary since 31 July. The WTO has already struggled for years to convince a sceptical public that it remains capable of reaching multilateral agreements on international trade, with the Bali package being seen as a potential turning point for the organisation’s troubled negotiating function.
This article is published under Bridges, Volume 18 - Number 29
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Government of Mozambique revises natural gas reserves of the Rovuma Basin upwards
The government of Mozambique has its projection for the amount of natural gas contained in the Rovuma Basin from 170 billion to 200 billion cubic feet, according to figures presented Tuesday in Maputo by the Mozambican President.
Pointing out some of developments over the past two years in the country’s natural resources sector, Armando Guebuza said that natural gas had been discovered in Areas 1 and 4 of the sedimentary basin, whose concessions are led by US group Anadarko and Italy’s ENI, respectively, without specifying the amounts contained in each project.
Guebuza, who was speaking at the launch of the 2nd Mozambique Geology Congress, also said that the amount of taxes from production and surface work paid by companies that explore natural resources in Mozambique rose from US$1.44 million in 2012 to US$15.8 million in 2014.
“We found world-class graphite in Balama in the province of Cabo Delgado, and confirmed commercial reserves of iron and palladium, in Tete, and heavy minerals in Inhambane,” said the Mozambican President, adding that a review of the Mining and Oil laws, approved Tuesday, would promote Mozambique “as a safe destination for investments.”
In terms of oil and gas projects in the Rovuma area Natural Resources Minister Esperanca Bias, pointed to a minimum investment of US$5 billion for their launch, which, “will increase with the planned factories [for liquefaction of natural gas] in Palma. ”
Bias also said that the Mozambican government was studying the development project for a floating natural gas liquefaction platform that ENI presented for its concession and said she believes that this would not interfere with the planned LNG units in the province of Cabo Delgado.
“It is probably better to have a floating rig for those deposits [in deep water] that are a great distance [from the mainland] and that may make their exploration unfeasible,” Bias said.
Apart from Anadarko Petroleum (26 percent), Area-1′s concession is in the hands of Mozambican state company ENH (15 percent), Indian groups ONGC Videsh (20 percent) and BRPL Ventures (10 percent), Japan’s Mitsui & Co (20 percent) and Thai group PTT Exploration and Production (8.5 percent).
The consortium led by Eni (50 percent) also includes the China National Petroleum Corporation (20 percent), Korea Gas, Galp Energia of Portugal and ENH, with 10 percent each.
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Tunisia is ready for its economic revolution
Following the revolution, Tunisia revealed two extraordinary assets. The first was the capacity to reconcile between different political, social and religious beliefs to reach a political consensus that respects the society’s pluralism. This stands in stark contrast to the recent turmoil across much of the Arab world.
The second, and perhaps less well-known, is that Tunisians now have an understanding of how even well-intentioned economic policies can get captured by political elites to the detriment of jobs, growth and the welfare of the Tunisian people.
These assets are important to bear mind as heads of state and business leaders gather in Tunisia this week to pledge support for the country’s ongoing transition. Quite apart from its many comparative advantages, such as a young and well educated population and its geographic location, Tunisia has the raw ingredients that could be transformed into a magnet for investments.
It is critical that Tunisia succeeds. Tunisia is a beacon of hope for the Arab region and shows the world that democracy can be successful. It is time to consolidate and to count on a vibrant private sector to deliver jobs as well as on international businesses willing to invest, seek opportunities and support growth. Building on its young and educated population, we call for increased private sector investments to support Tunisia. The World Bank Group has continued and even increased its support at this critical time. Let the world step up to the challenge.
Investors, be they domestic or foreign, typically look for a combination of political stability and economic policies that are conducive to competition and dynamic growth. Tunisia could provide both by drawing on the same vision that forged a groundbreaking constitution to undo the economic legacy of the past.
Three years after the revolution, the economy – and its transition – remains a high priority. Young people continue to face unemployment rates above 30 percent, with rates especially high among college graduates. Tunisia has struggled to bring back investors, restart its tourism industry, and provide the credit needed by the country’s businesses to grow and create jobs.
These are not just short term problems caused by the instability that followed the 2011 revolution. Rather they are result of an economic system inherited from the previous regime that needs to be significantly rethought.
A new report to be released soon by the World Bank shows how the previous regime used industrial policy and business regulations to protect a web of connected firms from competition. This resulted in higher prices for services such as telecoms, transport and banking, which in turn made it difficult for the exporting sectors – which could potentially employ a lot of people – to compete in world markets.
In so doing, the firms connected to the Ben Ali regime earned about 20 percent of the profits in the economy while they provided employment to only one percent of the workforce. While the regime and those who benefitted directly from this system are not in power anymore, some of the laws, regulations, and administrative practices that allowed them to capture key sectors of the economy are in need of urgent reform.
The knowledge of how the previous regime operated will help the new government design policies to reform the system and minimize the risk of capture. The transition governments have embarked on the reform path, but the urgency of the political transition has until recently delayed substantial economic transition. The pace of reforms will now have to accelerate, as the macroeconomic situation is precarious, and a recovery in private investment is needed to reach the dynamic growth that the country is capable of; one that provides opportunities for the many rather than the few.
Reforming the economy is a vital step toward unleashing the country’s immense potential. Our analysis identifies a range of activities that remain underexploited. These include the export of labor-intensive goods and services in fields like health and education, and for European firms to offshore accounting and customer services to Tunisia. The country has comparative advantages in the production of Mediterranean agricultural crops, such as durum wheat, dried fruits, and its world class olive oil, yet currently uses only a small fraction of its export quota to the European Union.
Our report calculates that reforms to streamline regulations and increase competition would generate an additional 50,000 jobs per year. An additional 38,000 jobs per year could result from reforms in the banking sector. And changing economic policies to boost agriculture and the export of wage-intensive goods and services would benefit an array of economic actors from farmers to entrepreneurs and college graduates.
Tunisia does not have to settle for the old economic model. Inclusive politics must now be matched by an inclusive economy. They are the essential ingredients for stability and growth, and the investments that will reinforce both. Tunisia and Tunisians have demonstrated remarkable political courage and determination in the pursuit of a more just, democratic and inclusive society. I have every confidence that if this same determination is placed in the economic field, Tunisia will see not only a successful political revolution, but also a successful economic revolution with a booming economy generating jobs and based on a vibrant and transparent economy, with opportunities for all.
Inger Andersen is the World Bank Regional Vice President for the Middle East and North Africa.
This editorial was originally published in La Presse on Wednesday, September 10, 2014 (French).
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EAC boss decries non-tariff barriers within Community
There is still slow progress in the removal of Non-Tariff Barriers in the East African Community (EAC) despite efforts in implementing commitments made in the customs union and common market protocol.
The EAC Secretary General, Dr. Richard Sezibera said that despite the coming into force of the common markets protocol, challenges still persist in trade facilitation and movement of people, goods, capital and labour across the EAC partner states.
According to Sezibera, this is not made better by the poor state of infrastructure, the slow pace of harmonization of work permits, who called for more efforts from regional governments, private sector, and civil society.
Sezibera was on Friday speaking at the third annual Secretary General’s consultative forum at Imperial Resort Hotel in Entebbe. The forum aims to provide a platform for dialogue between the private sector, civil society and other interest groups with the EAC Secretary General on how to improve the regional integration process.
The Secretary General’s remarks resonate with a study released in August by the East Africa Policy Centre which noted that formal and informal trade barriers remain major obstacles to economic growth and social development in the EAC (download the report here).
Mike Rotich, the EAPC executive director said high transportation costs due to corruption, bureaucratic delays and poor infrastructure are an impediment despite the measures put in place to drive business.
The study found that overheads and bribes account for almost 19 per cent of the companies’ total operation costs.
Drivers who were interviewed claimed that many unexpected overcharges and bribes have to be paid at check points and weighbridges on the borders.
Sezibera however noted that the private sector has contributed to the elimination of NTBs through monitoring and advocacy. For instance, to date 55 non-tariff barriers have been resolved, although 22 remain unresolved with 6 have been recently identified.
Speaking on behalf of the business community during the forum, John Bosco Rusagara the board member of the East African Business Council (EABC) pointed out that work permits are highly priced within the region, and with the heavy paper work issuance of work permits takes long.
The two-day forum held under the theme, “EAC: My home, My Business,” was attended by over 100 participants drawn from regional professional bodies of Burundi, Kenya, Rwanda, Tanzania and Uganda. There were also academia, media and EAC organs and institutions, development partners and other interest groups.
Prof. Tarsis Kabwegyere, the minister for general duties in the office of the Prime Minister said that Uganda had made progress in implementation of the common market protocol, citing the issuance of national IDs to facilitate movement of people in the region.
Kabwegyere also cited the removal of road blocks along the northern corridor within Uganda, the adoption of 352 of the 1,250 regional standards, and the setting up of a One-Stop Border Post at Malaba scheduled to be completed in November this year.
“With respect to the movement of workers, the key milestones are abolition of fees on work permits but on a reciprocal basis and the finalization of arrangements to pilot the national manpower survey,” said Kabwegyere.
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WTO bias creates imbalance, says S. African Minister
The South African Minister for Agriculture Senzeni Zokwana has reiterated his country’s support of India’s stand on public food stock-holding for food security at the WTO.
“The relationship with poor countries is important at a global forum like the WTO,” he said on the sidelines of an Indo-South African Week event in New Delhi.
“There is a debate about this (India’s stand) back home. We are aware that there has been unfair play between European countries and our (developing) countries. While they would try to put stringent rules on how we support our farmers, they are protective of their industry. It creates an imbalance,” the Minister said, adding that the question of trade and matters regarding the WTO.
Areas of cooperation
This was Zokwana’s first visit to India and the Minister believed there were numerous areas in the field of agriculture and food processing where the two countries could cooperate and facilitate exchange programmes between entrepreneurs and agriculturists to strengthen ‘South-South’ relations.
“India has developed expertise in food processing and promoting small-scale farming. We believe much can be done if we cooperate in areas like agro-processing, agro-tourism among others. India is also advanced in terms of genetic medicine which can benefit South Africa,” he said.
Zokwana also highlighted that South Africa was open to having foreign enterprises set up agricultural operations. “The Government believes in allowing foreign companies to lease land on a long-term basis because we need the expertise while it would also help raise productivity and employment in the country,” Zokwana explained.
Greater cooperation
The Minister urged greater engagement between the BRICS nations from the agricultural perspective to benefit individual economies.
“Our relationship with China has grown but we need to increase our presence in Russia and also engage more with Brazil who currently export more to us. We need to work out how to balance that and also enhance the fact that there are opportunities for all the countries involved,” he said.
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Developing countries need sufficient policy space to advance post-2015 development agenda, UNCTAD report says
A multilateral approach to trade rules should allow room for proactive trade and industrial policies for sustained and inclusive growth
As the international community sets about defining a new set of development goals, it is vital that countries have sufficient policy space to match the heightened ambitions of any new agenda, UNCTAD insists in its Trade and Development Report, 2014: Global governance and policy space for development launched on 10 September 2014. With a new set of wide-ranging sustainable development goals already tabled in New York, a post-2015 development agenda will not be feasible without the availability of more instruments and greater flexibilities in policymaking.
The report emphasizes the role that proactive trade and industrial policies can play in the post-2015 development agenda and points to various policies which, in the changing dynamics of the world economy, can help achieve sustained income growth, full employment, poverty reduction and other socially desirable outcomes.
On trade, the new report argues that negotiations on rule making need to refocus on multilateral agreements which recognize the legitimate concerns of developing countries. Multilateral rules and disciplines check inward-looking national economic policies – such as mercantilist trade policies – through which influential countries can harm the economic performance of others. But multilateral agreements should not encourage or push developing countries to relinquish policies that support economic development. Even though existing multilateral agreements have maintained some flexibilities for all World Trade Organization members and incorporated some special and differential treatment for least developed countries, they have also come with restrictions on the conduct of a widening array of trade and industrial policies.
The report also argues that developing countries should carefully consider the loss of policy space when engaging in bilateral and regional trade and investment agreements. Such agreements often come with stricter commitments in areas covered by multilateral agreements or extend to new areas, requiring policymakers to forsake the use of instruments that have proved effective in supporting industrialization. Conventional wisdom suggests that accepting such stricter policy and regulatory commitments is necessary to attract foreign direct investment and to enable firms from developing countries to join global value chains. The report, by contrast, suggests that while these commitments may provide short-term trade and employment benefits, in the longer run they can trap producers into commodity enclaves or low-value niches of manufacturing. The report also points to problems arising from the current international investment framework and the related ad hoc arbitration tribunals that have assumed important law-making functions usually allocated to States. In addition to the lack of transparency and coherence often observed in the operations of those tribunals, this set-up follows a model developed for resolving disputes between private commercial actors, and thus the tribunals have no reason to consider the broader interests of a host country and its development strategy.
The Trade and Development Report, 2014 highlights four elements of a more flexible approach to the choice, design and implementation of policies which will be required to attain the new set of development goals:
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First, industrial policy matters; even developed countries are again acknowledging its role in boosting productivity growth, encouraging innovation and creating decent jobs. The report points to the approach of the United States of America to industrial policy, often wrongly seen as a hands-off approach, which combines an “entrepreneurial State” with a “coordinating State” to skilfully use the policy space not circumscribed by international rules and commitments for sector-specific measures to support its manufacturing sector. The experience of the European Union illustrates how the adoption of a more horizontal – or economy-wide – approach risks hampering the achievement of wider policy objectives.
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Second, in commodity-dependent economies converting natural resource rents into sustained growth and structural transformation will require accelerating industrialization through a high level of investment and incentivizing a virtuous link between trade and capital accumulation. An industrial policy that supports the private sector in identifying and expanding activities in promising manufacturing sectors could greatly facilitate such diversification efforts.
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Third, global value chains are spreading and can open new opportunities for industrial development and job creation – but that should not mean simply aligning policy measures to the interests of the lead firms. The evidence that integration into these chains spurs industrialization is at best ambiguous: structural transformation episodes even if initially successful, are often linked only to “thin” industrialization that offers few opportunities for economic and social upgrading. The risk of being trapped in a low-level niche of the value chain may be too high for countries to forsake the use of instruments that have proved effective in supporting industrialization. The report notes that even in China, which has successfully used value chains to boost its trade in the electronics sector, only 3 per cent of global profits in the sector accrue to Chinese firms.
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Finally, the developmental effects of export-led growth strategies more generally appear to be running out of steam since the Great Recession, owing to the growth slowdown in developed countries and a reduced elasticity of their demand for imports from developing countries. To avert the risk of a sharp slowdown in growth, developing countries may wish to rebalance their growth strategies towards less emphasis on exports to developed countries and a greater role of domestic and regional demand. Pursuing proactive trade and industrial policies could help to make the necessary adjustments to developing countries’ productive capacity.
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With the fiftieth anniversary of UNCTAD coinciding with the seventieth anniversary of the Bretton Woods institutions, the report also looks at how, after the end of the Second World War, the international community tried to build a more inclusive and sustainable international economic order around effective multilateral supports and disciplines without unduly compromising the policy space needed to meet a new set of economic and social goals. Taking that history seriously, the report suggests, means that today’s efforts to ensure adequate policy space within the global trading system will deliver the desired outcomes only if accompanied by effective reform of the global financial architecture to ensure more stable and long-term financing, both public and private, for poor economies.
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Government to announce new Foreign Trade Policy soon
The government will come out with a new Foreign Trade Policy, 2014-19 within the next two to three months to increase the exports.
Showcasing the government performance here at a press conference, Commerce and Industry Minister Nirmala Sitharaman said, this time the trade policy will be different from the previous one and the government has initiated various steps to improve it.
The government also plans to strengthen the Indian Institute of Packaging in order to help it emerge as a technology hub/centre for setting packaging standards of export oriented products in line with international trends/norms and improving/controlling quality of export packages.
On the issue of WTO, Sitharaman said that negotiations are on to find a permanent solution to India’s food stockpiling. She said, WTO member countries would understand India’s position on food stockpiling , which is meant for public distribution system in the country.
She said, government is mulling dual usage of Special Economic Zones land, to help developers earn faster returns. Government will start online application process for SEZ developers by the end of next month.
Commerce Minister also said that the government is not considering an immediate cut in the gold import duty despite the current account deficit narrowing.
As per the current rankings, India is the 19th largest exporter (with a share of 1.7 percent) and 12th largest importer (with a share of 2.5 percent) of merchandise trade in the world. In Commercial Services, India is the 6th largest exporter (with a share of 3.3 percent) and 7th largest importer (with a share of percent).
The government also laid out stress on forging stronger relationships in its immediate neighbourhood. In this regard, a more focused direction would be given to the utilisation of FTAs and to establish new approaches to preferential trading with Latin America, CIS region and Africa. Government will also strategise global trade engagements to conclude trade pacts, where negotiations are in various advance stages, such as with EU, PERU/Columbia, COMESA, RCEP, MERCOSUR, Russia, China, US.
A National Policy for rubber sector is also being formulated. While a special agency, namely the ‘Saffron Production and Export Development Agency’ (SPEDA) will be set up for development, production and marketing of saffron with headquarters in Jammu and Kashmir.
A press release from the PIB also mentions that a mandatory standards regime will be implemented, to protect consumers and also raise the quality of merchandise produced which in turn raises the capacity to export to discerning markets.
The government hopes that this together with promotion of our traditional brands of goods like tea, spices, ayurvedic products and services like, yoga, wellness and health care as valued Indian brands can lead to greater value addition and export realization.
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Annual EAC Secretary General’s Forum for Private Sector, Civil Society and Other Interest Groups Opens in Entebbe Friday
Uganda’s Minister for East African Community (EAC) Affairs Hon. Shem Bageine will officially open the annual EAC Secretary General’s Forum for Private Sector, Civil Society and Other Interest Groups at the Imperial Resort Beach Hotel on Friday, 12th September, 2014.
This year’s theme is: “EAC: My Home, My Business”.
Over 100 delegates from the Partner States are expected to attend the two day event; the third in series since 2012. The first was held in Dar es Salaam, United Republic of Tanzania, and second was last year in Nairobi, Republic of Kenya.
The delegates will be drawn from the Partner States’ Private Sector Organizations (PSOs), Civil Society Organizations (CSOs), professional bodies, academia/universities, media, EAC organs and institutions, development partners and other interest groups.
The EAC Deputy Secretary General (in charge of Productive and Social Sectors), Hon. Jessca Eriyo, said that the Forum’s objective was to provide a platform for regular dialogue between the EAC Secretary General and the Private Sector, Civil Society and other interest groups on how to improve the EAC integration process.
“The 3rd Forum is an opportunity to widen and deepen EAC integration process and ensure stakeholder participation and inclusivity,” according to Hon. Eriyo.
She added: ”The Forum will provide a space to dialogue on opportunities and challenges provided by the Regional integration process as well as share experiences.”
Professor Yash Tandon from Uganda, a renowned intellectual and policy-maker among others, will give a key note address on the Forum’s theme. Prof Tandon is the former Executive Director of the South Centre; a think tank founded by leaders of the South, among them China, India and Brazil. Tanzania’s Founding President Dr Julius Nyerere was the first Chairman of the Centre.
Other papers to be tabled at the Forum include: “Post 2015 EAC Development Agenda”; ”The Rights and Freedoms under the EAC Common Market Protocol”; “Food Security, Climate Change Mitigation and Adaption” and; “Enhancing the Competitiveness of the EAC”, among others.
The Forum’s Regional Dialogue Committee has been working hard for over five months to ensure the success of the Conference.
The Forum’s symbolic kick-off is tomorrow, Thursday 11th September, 2014 with a community service and sensitization at the Nakiwogo Market, Entebbe.
Later delegates and members of the public will engage in cleaning up exercise of the Market. A voluntary HIV/AIDS counseling and testing will also be conducted; courtesy of the Entebbe Municipal Health Department.
The East African Business Council (EABC) is tasked to lead organization of this year’s Forum.
Background
The Dialogue Framework Forum for Private Sector, Civil Society and other interest groups in the EAC integration process was endorsed by the EAC Council of Ministers at its 26th meeting in November 2012 in Nairobi, Kenya.
The Forum is guided by the principles of cooperation for mutual benefit, trust, goodwill, active and constructive participation, inclusivity and respect for diverse views.
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Effective marketing, perception management needed for FDI
The much-needed foreign direct Investment (FDI) required to revive the country’s ailing industry can best be attracted through effective marketing and perception management, an official with the Zimbabwe National Chamber of Commerce (ZNCC) has said.
The international investment community has continued to withhold direct capital inflows primarily citing lack of policy clarity.
This scenario has partly led to a nationwide scaling down and, in many cases, shutting down of industries compounded by an acute liquidity crunch.
ZNCC vice-president David Norupiri yesterday said agro-based linkages need to be revived for downstream industries to benefit as Zimbabwe is an agro-based economy.
“We are an agro-based economy. There has been no support from the banking sector as far as agriculture is concerned as compared to previous farmers who had access to loans,” he said.
He said should Zimbabwe choose to go the path of export-led growth and industrialisation, the positive ripple effects would also lead to a stemming down of finished imports, which have affected local manufacturers.
“The protection of industry would also need to be complemented by initiatives that are in line with regional countries. Non-tariff barriers such as new standards of import quality and issues to do with licensing would also be helpful to protect local industry,” he said, adding that government had already done enough in as far as coming up with direct tariffs.
A recently published United Nations Conference on Trade and Development (UNCTAD) World Investment Report for 2014 shows that FDI inflows stagnated at $400 million last year.
This is in comparison to the $1,8 billion in FDI inflows for Zambia, Mozambique with $5,9 billion and South Africa with $8,1 billion out of $13,1 billion that flowed into the Sadc region.
In a September trade brief for South African-based Trade Law Centre authored by Brian Mureverwi (click here to download the paper), it is argued that export-driven industrialisation is typically designed to ensure that returns on exports are no less attractive than returns on domestic sales.
“The policy mix requires that where possible inputs are provided at world prices, and exports of the final product are subsidised to compensate for more costly inputs of domestic provenance. At the same time, the domestic market is not strongly protected from competing imports,” he said.
The document states that industrial policy should be dynamic and government departments must have the ability as well as motivation to constantly adapt to the changing needs of the industrial sector.
Another possible route would be import substitution industrialisation (ISI) where domestic businesses receive duty-free imported inputs and protected from finished imports.
“For ISI to yield positive results for development, it should provide limited, time-bound protection. Industries that fail to become competitive should not be protected indefinitely,” said Mureverwi.
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Trade: Mauritius to set up a National Export Strategy
Mauritian Industry and Commerce Minister Cader Sayed Hossen Wednesday indicated that Mauritius will soon set up a National Export Strategy to address trade opportunities and challenges as a result of erosion of trade preferences in a bid to formulate a roadmap for key sectors with export potential.
Taking part in an economic discussion organised by the Mauritius Export Association (MEXA) in Port Louis, Hossen said the island cannot wait for the dark clouds of economic downturns in Europe to be cleared.
“We need to seize opportunities that are lurking on the economic horizon”, he said, emphasising that taking advantage of the African renaissance, the high purchasing power in the Gulf countries, an increasingly open market in India and capturing opportunities in niche segments in traditional markets would be the island’s major strategic trade thrusts.
Hossen said Mauritius needs also to have a regional export strategy as one of the drivers for high growth by leveraging on economic diplomacy as well as improving air and sea connectivity.
“GDP in Africa is projected to grow by over 60 percent by 2020 and consumer expenditure in the continent can move beyond the US Dollar one trillion mark in the near future.
“There is indeed no doubt that Mauritius can fully capitalize on its potential as a corridor for trade between Asia and Africa”, the Minister observed.
For his part, MEXA’s chairman, Phil Ryle, said that by the nature of its business the export sector is vulnerable to the whims and caprices of global economy.
“There is no doubt that diversification of the export market has made the sector more resilient over time”, he said.
PANA reports that 60 percent of Mauritius exports go to the European Union.
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Fostering the spirit of entrepreneurship
Lessons for Namibia from the 2nd Brazil-Africa Forum 2014
Last week I moderated a session, titled ‘Africa and South America: Challenges for connecting the two continents’, one of the many sessions at the second Brazil-Africa Forum held in Fortaleza in the Ceara province of Brazil. The role of the Brazil Africa Institute is to link in promoting the interests of Brazil and African countries.
What is significant about the partnership between Brazil and Africa is that improved structural changes and a healthy policy environment that will foster a positive entrepreneurial spirit is needed in both continents. This two-day event was attended by high-ranking government officials, business leaders, potential investors, and representatives from think tanks and the academic sector.
Africa has become increasingly an attractive hub for foreign investors in the last 10 years, and interestingly enough our continent has a positive Gross Domestic Product (GDP) growth, at 6.6 percent in 2013, due to an increase in prices of commodities.
The forum also looked at infrastructure, partnerships and development that could ensure a good environment for public and private companies to create partnerships for future infrastructural projects and contribute to strengthening the confidence of both African and Brazilian investors. If we wish to sustain the benefits of economic growth as Africans, we need to address the gaps in infrastructure, continue investing in renewable energy, promote education and skills development, ensure food security and enhance the productive capacity of the agriculture sector.
The Director of Program for Energy and Infrastructure: Mossid Emissiry from NEPAD (New Partnership for African Development) based in South Africa introduced the audience to the Program for Infrastructure Development in Africa (PIDA) launched by the African Union in 2010. Emissiry pointed out that the objectives of this program are to promote socio-economic development and poverty reduction in the African continent through improved access to integrated and continental infrastructure networks and services.
On the other hand Brazil has enormous investment opportunities across various sectors. The chief executive officer of Angola Cables Antonoi Nunes talked us through the South Atlantic interconnection through an undersea cable. Angola Cables is the telecommunications provider, and they wish to build a cable from Angola through the Atlantic Ocean to Fortaleza, Brazil, directly and another one to Miami, USA. This is more about integrating the continents and making communication and access to the various markets possible.
Another interesting project at the forum was from Camargo Correa a Brazilian construction company that works to transform realities. One particular and insight point addressed by Kallil Farran, the Sustainable Development Manager, was the issue of Corporate Social Responsibility.
Camargo Correa expands its operations to Angola by building road infrastructure and in Mozambique they brought hope by building classrooms for communities where there were none.
All participants of the forum visited some of the social and welfare projects of Camargo Correa, Villa da Mar, project for the recovery and redevelopment of the waterfront in Fortaleza.
What are the lessons for me as a Namibian from the Brazil-Africa Forum? I can honestly say that Brazil and African countries have common challenges, given that Brazil and most African nations experienced colonization in the past. There is so much to teach and learn from one another. I picked up a few significant points one of which is “leadership”. I think through this forum both Brazil and Africa are trying to tell one another that ‘We have to believe in ourselves before we have to prove anything as that will be the key to reach our potential.’
Secondly, this platform should be seen as a partnership between Brazil and Africa and should be a win-win situation and no party should exploit the other.
Namibia can indeed try and learn from successful partners of Brazil in the region and join forces and as a nation we can only become better.
From Camargo Correa I learned that value in a company should not only be created for shareholders, but also for the society, through attitudes aligned with demands and challenges.
Corporate social responsibility is an issue some Namibian companies take very lightly. Companies will write out cheques for a project, but are never interested in the actual project, whether it was well executed or not.
Dr Wilfred Isak April holds a PhD (Entrepreneurship) from New Zealand. He currently lectures in Entrepreneurship and Management at the University of Namibia.
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Checkers and Shoprite probed over mislabelling
The Namibian Standards Institution (NSI) has launched an investigation into Freshmark, Checkers and Shoprite outlets for mislabelling fresh produce.
The enterprises have labelled products indicating that they are grown in Namibia when in actual fact they are imported from South Africa.
Last week, The Namibian reported that the Freshmark products, which are sold by Checkers and Shoprite, are grown in South Africa although the labels say they are produced in Namibia. This revelation led to the NSI launching an investigation, in which sample products were taken from several Checkers and Shoprite shops.
The Namibian understands that the NSI plans to take strict measures to rectify the issue.
NSI general manager for corporate services, Rozina Jacobs, confirmed that the body has launched an investigation into the matter.
She said the NSI instituted an investigation on Checkers City Centre and Shoprite Lafrenz in Windhoek and found that both shops had misleading labels.
“We have taken samples and issued prohibition to both shops while we are investigating. They have 11 days to rectify the situation,” Jacobs said.
Speaking from Shoprite headquarters in South Africa, spokesperson Sarita van Wyk said the produce carrying the ‘Product of Namibia’ signage originates from Namibia.
“Shoprite is committed to procure as much produce as possible locally in countries where we operate and only import if the required quality is not available locally or out of season,” said Van Wyk.
She said their fresh produce procurement arm, Freshmark, however, utilises South African packaging “that is produced in bulk as a cost-saving exercise in the interest of our customers’ pockets”.
Van Wyk said the exact country of origin is indicated by the sticker applied to the package.
“We will however revisit this practice and investigate alternative methods. Shoprite apologises for any misunderstanding this may have caused some of our loyal customers and valued Namibian fresh produce suppliers,” she said.
A consumer, Reinhold Kambuli, who alerted The Namibian of the mislabelling, said this kind of action cost the Namibian farmers because Namibian customers assume they are buying local products.
Team Namibia CEO Daisry Mathias yesterday said she had contacted Shoprite and Checkers to arrange a meeting next week to discuss the issue.
“We need the retailers on board, to stop this,” she said.