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SACU revenue dependence raises concerns
A financial analyst has expressed concern about about Namibia’s reliance on revenue from the Southern Africa Customs Union (SACU), saying the government needs to diversify its source of revenue.
James Cumming, Head of Research at Simonis Storm Securities told a Namibia Chamber of Commerce and Industry post budget meeting that he is concerned about over reliance of budget revenue from the SACU pool, saying 35% to 40% of tax revenue is from the SACU.
He explained that government needs to diversify its revenue sources as future adjustments to the SACU revenue formula could lead to lower revenue from this agreement.
The Minister of Finance, Saara Kuugongelwa-Amadhila, told the meeting that sources of revenue have been increasing and are expected to grow over the next three years. She said new sources of revenue have been identified with preliminary studies already underway in order to secure a consistent revenue stream in the future.
Leonard Kamwi, head of advocacy and research at the Chamber, said he was disappointed that previous budgets had failed to reconcile expenditure on education with the resulting output, which has been below par. He said it is not enough for the government to target sectors in their wholesome but rather target the prospective beneficiaries. “The budget should target specific necessary skill sets as opposed to the whole sector,” said Kamwi.
Kuugongelwa-Amadhila defended the proposed export tax on natural resources, indicating it was meant to minimise the disparities that arise from the exploitation of Namibia’s naturally endowed resources.
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Japan, U.S. should cooperate to stop TPP talks from drifting
Ministerial talks for the Trans-Pacific Partnership multilateral economic partnership agreement once again failed to reach a basic agreement, mainly due to a confrontation between Japan and the United States.
The TPP negotiations should not be left drifting. Japan and the United States, the countries responsible for leading the negotiations, must swiftly put the talks onto a desirable track.
The latest TPP ministerial talks held in Singapore, in which 12 countries including Japan, the United States and Australia participated, have ended.
It was a fresh start from the previous talks in December, but the negotiations have broken down for the second time. No schedule has been officially set for the next meeting. This result is utterly disappointing.
The aim of the TPP is to create new free trade rules in the Asia-Pacific region to lead the world with an economic partnership framework for the 21st century. However, if the negotiations were to lose momentum, it would be difficult to break the state of deadlock.
The main reason that the participating ministers have given up on reaching a basic agreement was a confrontation between Japan and the United States over the elimination of tariffs.
Regarding the Liberal Democratic Party’s insistence that five sensitive agricultural categories, including rice, wheat and barley, be exempted as sanctuary items, the United States has maintained its hard-line stance, persistently seeking tariff cuts on them. Japan sought a point of compromise on the five categories by suggesting the possibility of lowering tariffs on beef and pork to sound out the U.S. reaction. However, the abyss between the two countries on the issue was so deep that they could not find any point of compromise.
On the issue of tariffs on automobiles and auto parts, which Japan demanded that the United States remove, the two countries could not solve their confrontation.
It will be difficult to find a way out of the deadlock in the TPP talks if Japan and the United States, two economic giants, only stick to their negotiation principles and do not show flexibility. The two countries should reflect on their attitudes, which have lacked broader perspective.
Reshaping the talks
Australia and emerging countries such as Malaysia, which have closely watched the Japan-U.S. negotiations, have also become passive in the TPP talks. Broad differences were also seen between the claims of the United States and emerging nations as well. Japan and the United States should feel a serious sense of responsibility for holding up the overall TPP talks.
The focus from now on is how to put the talks onto a desirable course. The 12 countries are expected to have the next meeting when the Asia-Pacific Economic Cooperation forum holds a meeting of trade ministers in Qingdao, China, in May.
Another important factor for breaking the deadlock of the TPP talks is a Japan-U.S. summit meeting between Prime Minister Shinzo Abe and U.S. President Barack Obama, who will visit Japan in late April. It is inevitable that the TPP should become a main discussion agenda for their talks.
In the United States, the protectionist pressure has been increasing with midterm elections of the U.S. Congress scheduled for November. For this reason, we are concerned about how the U.S. side’s difficulty with compromising in the talks will play out.
Obama has maintained that concluding the TPP agreement is the top priority issue for employment and export expansion. We hope he exercises his leadership in domestic coordination and efforts to make progress in the TPP negotiations.
The attitude of Abe, who made the TPP a pillar of his growth strategy, will be put to a test. Abe must stand at the helm in finding a point of agreement with the United States, while reinforcing the competitiveness of Japan’s agricultural sector ahead of market liberalization.
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BRICS to set up their bank within five years, progress slow – Russia
The BRICS bloc of emerging economies will set up its development bank with a total capital of $100 billion within five years, but member countries still haven’t agreed on their share in the bank’s structure, a senior Russian official said on Tuesday.
The bank is being set up by Brazil, China, India and South Africa to fund infrastructure projects. But it has been slow in coming, with prolonged disagreements over funding and management of the institution.
The start-up capital of $50 billion would eventually be built up to $100 billion. Russia has proposed that each member contributes an equal, 20 percent share. Other BRICS officials say their share should depend on the size of their economies, Russia’s Deputy FinanceMinister Sergei Storchak said.
“Russia’s stance is that this is a new development bank, based on new principles, so we vote for equal participation, 20 percent from each,” Storchak told journalists.
Establishing the bank was first proposed in 2012. It was approved last year at a BRICS summit in South Africa.
Officials from the group met last weekend in Sydney on the sidelines of a meeting of thefinance ministers and central bank governors from the Group of 20 developed and developing nations.
“After numerous attempts, we were able to agree that the process of building up the capital … will be stretched over time,” Storchak said. “We managed to come to an agreement that the period of contributions to the capital’s share can be up to five years.”
The group has struggled to take coordinated action in the past year, after the scaling back of U.S. stimulus prompted an exodus of capital from their markets. That in turn raised fears about the health of the BRICS economies.
The five-year span allows time for the global economy to improve and for growth in emerging markets to revive, which would help in replenishing domestic budgets, Storchak said.
“(Then) we will get more favourable conditions for countries to fully engage in the bank’s operations,” he said.
The location of the bank, another long-debated issue, was not decided in Sydney.
“There are interesting diplomatic negotiations because each country has declared that they will propose their candidates (for the bank’s headquarters),” Storchak said. “We have reached an agreement that it should be decided through … consensus.”
The group’s other project, a $100 billion fund designated to steady currency markets has also been off to a slow start, awaiting a final approval.
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World Bank to help map Africa’s mineral resources
There may be a trillion dollars worth of minerals buried underneath the African continent – but information on those resources remains in many cases unknown, unmapped or otherwise underutilized.
That’s why the World Bank is creating a $1 billion fund to help governments map the continent’s resources and integrate that data into comprehensive platform that is accessible to mining companies, governments and the public. The ambitious effort, which is still in its infancy, aims not only to make investment in Africa more attractive to mining companies, but also to create a level playing field for governments to negotiate with those very companies, according to Paolo de Sa, the manager of the oil, gas, and mining unit at the bank.
The fund, to be officially launched in July, will support the African Union’s strategy to help governments take advantage of and better manage their mineral resources, part of a larger effort to help the extractives industry contribute more to the development of African economies.
Building the billion dollar map will involve data collection and mapping, but also the integration of that data into a universal platform. That process includes gathering and integrating information that already exists in government ministries, conducting gap analyses, and then implementing surveys and mapping projects across the continent to fill in those gaps.
For governments
While outside expertise will be certainly needed, an important part of the effort will be capacity building in government-run geological surveys in a regional integration effort spearheaded by the African Union, De Sa told Devex.
“At the end of the day, the governments are the owners of the information, and they need to be capable of updating and interpreting it and using it for the different policy objective that they have,” he said.
The World Bank, for its part, plans to continue support for African geological surveys at its current level, which will amount to about $200 million of the total amount allocated for the fund. The institution is in the process of creating a multi-donor trust fund for contributions from donor governments, and De Sa said that the United Kingdom, Canada, and Australia had expressed initial interest in supporting the fund, while eventually, he hopes, mining companies themselves might also contribute to the effort.
The mapping and harmonization effort itself is modeled on the way that Canada and Australia integrated their provincial surveys as well as similar efforts underway in the European Union.
Capacity building has already started in Southern and Eastern Africa, where the World Bank already supports several projects with government surveys. De Sa said that in two to three years, data integration will likely expand to Central and Western Africa.
Scientific project, not business investment
The prospect of monetizing the commercially relevant information should be an impetus for governments to ensure the accessibility of their information, but the true value of the maps will be in the way the data informs national discussions and decisions on resource management.
“This is not a money-making investment, this is much more of a scientific, access to data and transparency exercise from our point of view,” De Sa noted about a project he sees as having potential beneficial “side effects” beyond increasing investments and raising revenues for the government.
“It will be a very, very strong tool to inform government on policies related to the management of other natural resources, development of infrastructure, and of course management of the most precious substance on Earth – water,” he said.
While the goal of mapping the entire continent is very long-term, De Sa said that, assuming the initiative goes well, an obvious next step would be to create another fund to come up with an integrated map of South American mineral resources.
See also: Can Natural Resources Pave the Road to Africa’s Industrialization? - Paulo De Sa, World Bank Blogs (28 February 2014)
Source: https://www.devex.com/en/news/world-bank-to-help-map-africa-s-mineral-resources/82916
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Tanzania: Talks on Agoa extension going on well – Kigoda
The government has said that talks on its request to have the US government extend the African Growth and Opportunity Act (Agoa) are progressing well.
Speaking in an exclusive interview with The Guardian from Dodoma, Industry and Trade minister Dr Abdallah Kigoda said the talks to extend the Agoa market after expiry next year are in good progress and the US government is also thinking of renewing the programme.
The trade programme is due for expiry in 2015, but there are feelings that it has not been fully utilised by African countries.
“We are still in talks with the American government to ensure that Agoa tenure is extended although most African governments have not fully utilised the opportunity given. Agoa market is very useful in promoting trade between Africa and America,” he said.
Dr Kigoda challenged the Tanzanian business community to export value added products so as to benefit from the opportunity given.
“Since Agoa was signed into law in May 18, 2000 it has been offering incentives for African countries that export a wide range of products to the US. Tanzania has somehow utilised the market compared to its neighbours such as Kenya but we have to improve our products by insisting on value addition so as to earn better prices,” he said.
The minister noted: “We have to insist on quality to our products, one among the challenges that face our traders is quality, I am sure that if we will improve the quality of our products, surely we will win the Agoa market and other markets as well.”
However, statistics issued recently say that in the first half of 2012, US total trade with sub-Saharan Africa (SSA) reached $48bn, a decrease of 24 percent compared to the same period in 2011.
In accordance with 7 percent growth of exports to the world, US exports to SSA (mostly composed of machinery) increased by 4.5 percent, nearly reaching $11bn but representing only 1.4 percent of total US exports to the world.
The top five African destinations for US products have continue to be South Africa, Nigeria, Angola, Ghana and Benin.
While exports to South Africa decreased by 4 percent and those to Nigeria remained constant, sales to Angola increased by 14 percent (largely increase in US exports of electrical machinery).
Exports to Ghana by 10 percent (increase in US exports of machinery), and to Benin by 7 percent (increase in US exports of pharmaceutical products).
The only major increases in US imports from SSA originated from Tanzania (precious stones) and Senegal (oil).
In the first half of 2012, US imports from SSA decreased by 29 percent, falling to $27bn and representing only 2.4 percent of total US imports from the world.
This decrease was mostly due to a 32 percent decrease in US minerals, fuel and oil imports and a 19 percent decrease of precious stones and metals imports from SSA.
US imports from SSA originated, for the most part from Nigeria, Angola, South Africa, Chad and Congo.
US imports (mostly oil) from Nigeria dropped by 44 percent, from Gabon by 76 percent, and from Ghana by 57 percent.
During this timeframe, Agoa imports totaled $18.7bn, 29 percent less than in the same period in 2011, mainly due to a 32 percent decrease in petroleum product imports.
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Boosting trade with Africa
New measures aim to encourage trade and promote SA as an African investment hub
We all know the stories of Shoprite, MTN and Game’s growing presence on the African continent. But these companies are not alone – they represent just a few of the increasing numbers of South African companies that are taking advantage of growth opportunities on the African continent.
Improved transport, telecommunications, financial and diplomatic links, as well as robust economic growth on the continent have resulted in increased levels of trade between South Africa and other African countries.
In 2012 the rest of Africa accounted for 12% of our dividend earnings, up from 2% in 2002 and 28.2% of our exports up from 22.6% in 2002. To put it in context EU the accounted for 18% of exports last year.
South Africa’s economic prospects are becoming increasingly intertwined with that of the rest of the continent and the government is committed to supporting this expansion. It will provided tax revenue, profits and dividends in the receiving country, and in South Africa.
As a result government has announced measures to improve South Africa’s attractiveness as a hub for companies – local and international – wanting to expand in Africa.
Extending the HoldCo subsidiary regime
In 2013 Treasury allowed JSE-listed companies to establish a ‘HoldCo’ to hold their African and offshore operations. Government now plans to extend this regime to facilitate investment into Africa, and beyond.
For JSE companies it will increase the size of allowed transfers from R750m to R2bn a year. Applications for transfers of up to 25% of the listed company’s market cap will be considered by the Reserve Bank, provided there is demonstrated benefit to South Africa.
Unlisted companies may operate HOldCo’s under the same restrictions as listed companies, except that the size of transfers to their HoldCo is limited to R1 billion a year.
Government’s plans go further than this.
National Treasury is proposing the introduction of “foreign member funds”, which would not be subject to the macro prudential limit imposed on all institutional funds. These funds could be collective investment schemes and alternative investment funds such as private equity and venture capital funds. They would be able to source funding from non residents, domestic institutional funds and individuals, but they do need to be domiciled, managed and tax compliant in South Africa.
The objective is to support South Africa as a hub for African fund management.
Treasury also wants to support South African firms in their bid to raise capital in order to expand in Africa and other emerging markets. It is proposing that unlisted technology, media, telecommunications, exploration and other R&D companies should be allowed to freely lift offshore to raise capital for their operations, provided they remain based in South Africa and provided they have a secondary listing in South Africa within two years of the offshore listing.
In addition, listed companies will be allowed to freely list secondary listings to facilitate expansion.
To support South Africa’s role as a financial centre for Africa a number of other steps will be taken: New regulations to facilitate the operation of foreign central counter parties will be released shortly. This will facilitate the establishment of foreign market infrastructure of the clearing of derivatives. In addition, Treasury has been working closely with the JSE and local banks to develop an electronic trading platform for South African government bonds. This should enhance price transparency, liquidity and regulation in the secondary government bond market, which in turn will encourage greater global participation in that market.
Government is proposing a number of other initiatives which it believes will reduce the administrative burden and cost of doing business for SA firms, investors and individuals – for instance customers will be allowed to process advance payments for imports of up to R50 000 upon presentation of an invoice only.
See also: SA’s economic prospects increasingly tied to African continent’s - Minister Pravin Gordhan on South Africa’s economic prospects in 2014 Budget Speech (National Treasury, 26 February 2014)
Source: http://www.moneyweb.co.za/moneyweb-2014-budget/boosting-trade-with-africa
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Ministers of Finance and Trade endorse compromises for concluding EPA negotiations
West Africa’s ministers of finance and trade have adopted the compromise proposals for concluding the decade long negotiations of the Economic Partnership Agreement (EPA) with the European Union for a free trade area of the two regions. The impending agreement will replace the previous trade regimes between them and comply with the requirements of the World Trade Organisation.
At the end of a meeting of the ministers under the aegis of the Ministerial Monitoring Committee (MMC) in Dakar, the ministers adopted the compromises proposed during the preceding meetings of senior officials and chief negotiators that had stalled the negotiations for about a year and urged Member States to undertake the necessary tax and economic reforms to ensure the development of their economies.
The proposals examined by the ministers emanated from the 6th February 2014 meeting of the chief negotiators of the two parties held in Brussels where they endorsed the concessions made during the 24th January 2014 meeting of their senior officials held in Dakar in order to resolve their divergences’ and conclude the negotiations.
The compromise proposals are in the areas of market access where the region has agreed to liberalise 75 per cent of its market over a 20 year transition period, based on a scheduled tariff dismantling scheduled, a major shift from its initial position of 60 per cent over 25 years. There were also compromises on the other contentious issues of the EPA Development Fund (EPADP) for which the region had asked for 16 billion euros in new resources from the EU to enable it address its infrastructure deficits ahead of the implementation of the agreement.
As part of the compromises, both parties agreed on the priority needs valued at 6. 5 billion euros and centred around trade, industry, agriculture, infrastructure, energy and capacity building with the EU, its member states and the European Investment Bank agreeing to find a way to match the expressed needs with funding.
The impending conclusion of the negotiations will end an era of different trade regimes in the region following the 2007 signing of interim EPA’s by Cote d’Ivoire and Ghana in order to maintain their preferential access to the EU market.
Ministers of the MMC stressed the need to improve the competitiveness of the region through targeted investments in infrastructure and the adoption of joint standards in order to promote West Africa’s development and its integration into the global economy.
They also called for necessary measures to be taken to improve the disbursement of the resources of the EPADP while further consultations should be held organized private sector, civil society organisations and other stakeholders prior to the next Council of Ministers where the proposals will be considered before consideration and adoption by Heads of State and Government.
Source: http://news.ecowas.int/presseshow.php?nb=028&lang=en&annee=2014
See also: Economic Partnership Agreements: West Africa seals a deal at the 11th hour (ECDPM, 27 February 2014)
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SA farmers cough up to keep black spot out of EU
Complying with the requirements to export citrus fruit to the lucrative EU market had cost the local industry as much as R1 billion in the past year, Justin Chadwick, the chief executive of the Citrus Growers’ Association of SA, has said.
In taking measures to minimise citrus black spot, the local sector has had to pay for orchard treatment, repackaging of fruit and possible diversion of containers from the final destination if they are found to be contaminated.
South Africa exports about 650 000 tons of citrus fruit to the EU every year, which is estimated to bring in R4bn.
Chadwick said that while growers would benefit from the weaker rand, in the longer term those benefits would be absorbed by input costs, including the costs associated with shipment, which were in dollars.
A ban on local citrus exports to Europe was lifted last month but the local industry was recently notified that citrus exports might be further scrutinised by the EU.
Domestic citrus exports were banned from the EU in November last year after it was found that the introduction of citrus black spot fungal disease would pose a threat in Europe’s citrus-producing areas.
The European Food Safety Authority has revised its pest risk assessment on citrus black spot and found that there was still some risk associated with imports from South Africa.
According to the statement by the authority, it was recommended that the EU regulations should be retained and compliance should be enforced.
Chadwick said the cost of preventative measures was eating into citrus growers’ returns. Growers were losing R300 million in orchard treatment, with more costs incurred for picking contaminated fruit out of containers.
“If there is a fruit that is found to have [citrus black spot] on a certain container destined for Europe, one will have to unpack the whole container to get the fruit out. In some instances a container will have to be diverted into other markets,” Chadwick said.
Although no research had been done on the total cost implications of this, he estimated that prevention had cost the industry between R500m and R1bn in the past year.
Chadwick said the latest EU pronouncement created uncertainty. Despite this, the citrus industry was ready to comply with the EU’s import requirements. “It is not what the industry would have hoped for, but is nonetheless something we have anticipated and have prepared for,” Chadwick said.
Citrus growers would give the report careful consideration. “We will also continue our engagement with all parties to ensure that the highly successful trade that has been maintained with Europe for more than a century continues without interruption,” he said.
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Ambitious structural reforms can pave the return to strong and sustainable growth, OECD says
Adopting ambitious and comprehensive structural reform agendas will offer governments the best chance for a return to strong, sustainable and balanced economic growth that creates jobs and reduces inequality, according to the OECD’s latest Going for Growth report.
The report assesses and compares progress that countries have made on structural reforms since 2012 and takes a fresh look at what else can be done to revive growth and make it more inclusive. The OECD shows that most governments have continued enacting reforms, despite the challenges posed by a subdued growth environment, and highlights actions that can still be taken to boost productivity, raise public sector efficiency, improve educational outcomes, and strengthen labour markets.
“Signs of a broad-based recovery are becoming more tangible, but governments of advanced and emerging economies now face the risk of falling into a low-growth trap,” OECD Secretary-General Angel Gurría said during a launch event in Sydney.
“Australia has focused its G20 Presidency on promoting stronger economic growth and employment while making the global economy more resilient to deal with future shocks. The structural reform recommendations the OECD puts forward today offer governments practical ways to boost productivity, lift growth, create jobs and avoid the low-growth trap,” Mr Gurría said.
Mr. Gurría presented Going for Growth with Australian Treasurer Joe Hockey, ahead of the 22-23 February meeting of G20 finance ministers. He said the report’s analysis of potential reforms to product and labour market regulation, education and training, tax and benefit systems, trade and investment rules and innovation policies are applicable to OECD and G20 countries alike. The going for Growth analysis forms the basis of the OECD’s wider contribution to the G20 Framework for Strong, Sustainable and Balanced Growth.
“Progress on structural reforms can boost growth and living standards worldwide,” Mr Gurria said. “Slowing productivity growth and persistently high unemployment in many advanced economies cry out for further reforms. The vulnerability of many emerging-market economies to the ongoing tightening of monetary policy and the cooling of the commodity boom serves as a reminder that the case for structural reforms is also strong there.”
Going for Growth 2014 points to countries where reform action has been taken as well as where more needs to be done:
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The intensity of reform has remained highest in southern euro area countries like Greece, Italy, Portugal and Spain, which are suffering from high long-term unemployment and youth joblessness. Considerable action to reform the labour market and break down barriers to job creation and mobility has been taken, in particular in Spain in Portugal, which have begun growing again.
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Many emerging economies have yet to launch comprehensive structural reform agendas, and should implement wider efforts to improve education, address physical and legal infrastructure bottlenecks and bring more workers into formal sector employment. Mexico stands out among emerging economies for its adoption and ongoing implementation of broad-reaching reforms in competition policy, education, energy, financial services and telecommunications.
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In OECD countries which face particularly rapid population ageing, such as Japan, Korea and Germany, bringing more women into the labour market and ensuring that they are fully integrated remains a key challenge.
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Advanced and emerging economies are both encouraged to boost competition across their economies. Another country hard hit by the crisis – Ireland – has made the most progress on bankruptcy reform and toward creating a more competitive business environment.
A special feature of Going for Growth 2014 assesses the progress countries have made since 2008 toward reducing regulatory barriers. The new OECD Product Market Regulation indicators show that while governments have continued to move towards more competition-friendly regulation, progress has only been modest in most cases.
Competition in network industries and professional services like accounting, architecture, engineering and legal services continues to be held back by regulatory barriers to entry. Where regulatory settings have been improved, the legislated changes need to be fully implemented, to ensure the effective easing of administrative burdens on companies and the entry of new firms.
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Dti promotes SA at investment initiative in India
Trade and Industry Deputy Minister Elizabeth Thabethe will today lead a 40-member business delegation to India for the fifth annual Investment and Trade Initiative (ITI).
The ITI forms part of the Department of Trade and Industry’s export and investment promotion strategy to focus on India as a high growth export market, as well as a foreign direct investment source.
South Africa’s trade with India has doubled over the last five years with gold, diamonds, base metals and chemical products, among others, making up the bulk of exports.
According to Deputy Minister Thabethe, India’s emerging economy is expected to play an important and growing role in South Africa and the global economy in coming years.
“World trade patterns are changing, and trade with India is of growing importance to South Africa. Since establishing bilateral relations in 1993, trade between India and South Africa has grown steadily and consistently. The potential of India’s economy and the country’s growth trajectory is forecast to recover to previous levels in the coming years. This is good news for South Africa,” said Deputy Minister Thabethe on Sunday.
The objective of the ITI is to continue to create market access of South African value added products and services in India, and to promote South Africa as a trade and investment destination.
India has been one of South Africa’s top 10 trading partners for several years and is now South Africa’s fifth largest export destination and sixth largest source of imports.
The ITI will promote South Africa’s agro-processing, beneficiated metals and mining technology, automotive components and electro-technical sectors in India.
The ITI — which will include trade and investment seminars and business-to-business meetings, among others — will conclude on Friday.
Outward Investment Mission to Mozambique
Meanwhile, the dti will today also lead a delegation of companies on an Outward Investment Mission (OIM) to Pemba, Mozambique.
The mission aims to promote South Africa as an attractive trade and investment destination in the servicing aspects of the oil and gas industry and to also promote the Saldanha Bay Industrial Development Zone (IDZ) as an oil and gas servicing hub.
The dti Director-General Lionel October says that Mozambique has experienced recent success in oil and gas prospecting and it is reaching out to the international community to partner in the development of its upstream and midstream oil and gas sector.
“It is therefore an essential and opportune time for members of the South African oil and gas sector to visit Mozambique to develop business relations with their oil and gas industry counterparts and authorities. This mission will also make an ideal platform to showcase Saldanha Bay IDZ’s ability to service, maintain, repair and supply the increasing number of oil rigs requiring maintenance in the West and East Coast of Africa,” said Director-General October.
The IOM will conclude on Friday.
Related: ‘Help South Africa to Fast Track Growth’ (The New Indian Express, 25 February 2014)
Source: http://www.sanews.gov.za/business/dti-promotes-sa-investment-initiative-india
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USA to Swaziland: ‘Fully’ comply or lose AGOA
The message from the Americans is loud and clear: Swaziland has to ‘fully’ comply with five conditions or lose their eligibility to participate in the Africa Growth Opportunity Act (AGOA) programme.
In an exclusive interview on Friday, United States of America Ambassador to Swaziland Makila James said there was no longer any room for negotiations with the kingdom on the conditions that have to be met.
Listing the conditions, she said they include full passage of amendments to the Industrial Relations Act; full passage of amendments to the Suppression of Terrorism Act (STA); full passage of amendments to the Public Order Act; full passage of amendments to sections 40 and 97 of the Industrial Relations Act relating to civil and criminal liability to union leaders during protest actions; and establishing a code of conduct for the police during public protests.
Not some, but all of the conditions have to be met for Swaziland to continue enjoying the preferential trade agreement with the USA, the ambassador emphasised.
Contextualising the conditions, Ambassador James said: “The Industrial Relations Act did not provide for the registration of labour federations.
The Swaziland government has had this issue on its plate for several years. We understand that the Industrial Relations Act is now being looked at by government as a Bill was tabled in parliament by the Ministry of Labour this week, but the amendments have to be passed fully to allow for labour unions to work collectively to improve workers’ rights.”
On amending the STA and Public Order Act, she said: “These are equally important because even if federations are registered, the question remains whether or not citizens and workers will be allowed to have peaceful public gatherings without interference by the police?
Amendments to these two pieces of legislation should allow for a process of transparency and objectivity in deciding how people can come together for public gathering. As the law is currently interpreted, any public gathering can be stopped, as has happened in the past. We are concerned because this interpretation negatively impacts the rights of labor unions and members of the public to gather to hold May Day celebrations and other meetings to talk about conditions of employment and other issues which affect the economy broadly.”
The ambassador then articulated the need to get amend sections 40 and 97 of the Industrial Relations Act.
“Civil and criminal liability are of concern because they seek to punish labour leaders for the actions of other people. It is a violation of international law to hold people accountable for actions that they themselves do not commit. There are many models of acceptable language to control security threats but these pieces of legislations in their current form are overly broad.”
On police conduct, James articulated: “There is a need to give police better guidance so they can do proper law enforcement. No one can say Swaziland, just like any other country, has no right to have reasonable limits on behavior that can be threatening but right now the law is overly broad.’
The ambassador said throughout the 2013 calendar year, the United States had seen little progress by Swaziland on any of the five conditions.
“The assessment by the U.S government is that of great concern that Swaziland has not made any progress between December 2012 and December 2013.”
However, she said when the AGOA review came in December last year Swaziland was given an extension period up until May 15, 2014 because it was realised that the kingdom’s government was in transition; with a new parliament and Cabinet coming in.
“It was decided that Swaziland should be given a small period in which to finalise action on these critical issues with the new government in place.
That was the reason for not deciding in December 2013 that Swaziland was ineligible. The new period goes on up to May 15, which is an important date because at that point a U.S inter-agency committee in Washington D.C. will reconvene to look at whether Swaziland has fully complied with the five elements.”
The ambassador continued: “If the determination is that Swaziland has not complied, On May 16, Swaziland will become ineligible to remain in the AGOA programme.”
If Swaziland becomes ineligible, exporting goods to the U.S under AGOA will continue until the end of the calendar year.
“But on January 1, 2015, goods coming into the United States from Swaziland will be assessed duty because there will no longer be a trade preference to allow them duty-free entry,” added James.
Close to 20 000 workers stand to lose their jobs should Swaziland be kicked out of AGOA because investors would close business and seek to open shop in countries which are still eligible for the programme.
Swaziland has been enjoying benefits of the AGOA programme since the year 2000.
Brief Q&A
Sunday Observer: What has the Swaziland government taken to address these concerns?
Ambassador James: I have had extensive, high-level engagement with the government of Swaziland to raise these concerns and to hear from them. Generally, the position of the government is that they appreciate and support the AGOA programme.
They would like to keep the programme in Swaziland and that they will try and comply with the criteria for remaining eligible.
That has been their consistent line to me since I arrived in Swaziland. But as we say, when the rubber hits the road is – what are they doing specifically, and I have just articulated to you that since December 2012 to now we have not seen the actions matching the assertions of intent and their desire to see the programme remain in Swaziland.
And so, I would have to say that the Swaziland government needs to demonstrate through deeds, through concrete actions, its level of commitment because they have indeed expressed strong support for the programme.
Sunday Observer: According to your own assessment, will Swaziland meet these conditions?
Ambassador James: Let me say I was very pleased this week to see the minister of labour table in parliament an amendment to the Industrial Relations Act; this is one of the things that must be done.
But there are at least five elements that must be fully complied with and so I will reserve judgment because I think the goal for all of us between now and May 15, 2014 is to work as hard and diligently as possible to meet the terms.
We stand ready as the mission to be helpful where we can. If the government makes the commitment and is doing all it can, we will dutifully monitor how they are progressing and ensure that Washington is fully aware, but it really rests with the government to make serious, diligent and expeditious efforts to comply because deadline is coming very soon.
Sunday Observer: Say Swaziland meets some of the conditions, but not all of them, will that be a problem still?
Ambassador James: Because we have had this conversation not one, not two but several years going back, there is a great concern and great frustration that we have been extremely tolerant of the obstacles and challenges within Swaziland to meet some of these conditions. But it is important that Swaziland now understands that we are at a very critical point where they must meet all of the conditions and that is a very clear message that I hope the government will fully appreciate and will take on board.
We are at a point where on May 15, 2014, the assessment will be – has Swaziland met these conditions?
Sunday Observer: Have you engaged labour organisations regarding this matter?
Ambassador James: Yes, we have. We believe that as an embassy it is important to talk to all stakeholders. And so, we have talked to labour unions; have talked to workers; have talked to the private sector; and have talked to exporters who are currently using the AGOA programme.
They have talked to us and they have sent was their opinions. And so we believe we are giving the same message to everyone, which is:
If you care about AGOA remaining in this country, you should work with government to help them but it is really up to the government to create the conditions to remain eligible.
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Harnessing Africa’s emerging partnership
For most of the post-independence period, Africa’s commercial and development partnerships have been largely dominated by Western Europe, the United States and Canada. For many African countries, colonial ties have tended to be the single most important factor determining such partnerships. During the last two decades, however, many other countries have taken a keen interest in trade, investment, and other types of commercial and strategic relations with Africa. This new interest in Africa has significantly reduced; the relative importance of traditional partnerships to Africa’s development agenda. Notably, among countries that have taken an interest in Africa during the last two decades are emerging economies such as China, Brazil, Russia and India. Other countries that have ratcheted up their commercial ties with Africa over the last decade include Turkey, South Korea, Iran, Malaysia and a few others.
These emerging partnerships involve a wide range of activities, including trade and foreign direct investment in various sectors of several African economies – particularly, natural resource exploitation, manufacturing, agriculture and construction. The new partnerships have also evolved to include development cooperation in the form of aid, loans and grants. Although these emerging partnerships have been very supportive of development efforts in African countries, there is concern that some of these new arrangements could actually be exploitative – in other words, they may not be mutually beneficial. Instead, they may create opportunities for these new foreign partners to plunder Africa’s resources and leave the continent essentially underdeveloped.
There is no doubt that the increased interest in the continent by many countries presents African governments with a lot of opportunities, which could support and advance the continent’s development goals, especially in respect to the effective transformation of Africa’s economies. However, there are also many risks and challenges that come with these partnerships – in fact, if the challenges are not properly managed, the outcome could be exploitation and underdevelopment. As the new “scramble for Africa” continues to gather momentum, it is critically important that Africans rethink their relations – both with emerging and traditional partners – with a view to maximize the benefits from the partnerships and minimize the costs or negative aspects.
Over the last decade, Africa’s interactions with foreign actors – nations and businesses – have grown rapidly both in scope and complexity. Although it has become commonplace to refer to some of these interactions as involving new partners such as China and India, this is not strictly correct because these countries have been involved with Africa for many years. China, for example, has been involved with Africa for many decades, helping some colonies fight for independence and participating in the construction of infrastructure in newly independent countries, such as the transboundary infrastructure project called the Tazara Railway, which extends from Tanzania to Zambia. In addition, Russia, whose predecessor the Soviet Union was heavily involved with various African countries during the Cold War, continues to provide many countries on the continent with military aid as well as help educate their citizens at its universities. Nevertheless, the scale and scope of engagement between Russia and African countries have changed significantly since the heyday of the Cold War.
Although Africa generally receives a very low share of global foreign direct investment (FDI) flows, there has been a marked increase in FDI flows from emerging economies during the last few decades. For example, Brazil, Russia, China and India have in recent years significantly increased their investments in Africa, effectively joining the ranks of top investing countries in the continent. Similarly, many other developing countries have also increased their investments in Africa, indicating the growing importance of the continent to the global economy.
Although there has been a fair amount of diversification of FDI flows to different sectors of African economies, extractive industries remain the most important destination for investments from both traditional and emerging partners. Recent discoveries of natural resources, especially oil and natural gas, have been catalysts for increasing FDI flows. For example, both Chinese and Indian firms have expressed interest in investing in the natural gas block off of the Mozambique coastline. Although Chinese investments in the exploitation of natural resources can be found in practically all African countries, there is significant concentration in South Africa followed by Sudan, Nigeria, Zambia and Algeria. Russian companies, whose FDI to Africa topped $1 billion in 2011, have operations in aluminum extraction in Angola, Guinea, Nigeria and South Africa. Traditional partners such as the United States, Britain and France have also increased their investments in the continent’s natural resource sector.
There has also been an increased interest in recent years from non-traditional partners in land-for-agriculture. According to the Land Matrix Project data, India and China are among the top 10 countries investing in the agricultural sectors of many African countries and companies from both countries have significant investments in biofuels, soy and timber production at various stages of completion. For example, the Indian floriculture company, Karuturi, a major producer of cut roses, is now a significant investor in Ethiopia’s agricultural sector. Karuturi’s combined investments from 2007-2012 totaled 411,000 hectares of land for biofuel, palm oil and rice production. Although levels of production by Karuturi have not yet met the company’s or Ethiopia’s expectations due to severe flooding, the company has projected a tripling of food exports from Ethiopia by 2015.
The other indicator of growing commercial relationships between Africa and other countries is the volume of trade, which reflects at least in part the increase in commodity trade. Although Africa’s share of global trade remains low, it has nevertheless been increasing. For example, the volume of trade between India and Africa has been growing: 32.2 percent per year for African exports to India and 23.6 percent per year for Indian exports to Africa. China’s value of total African trade was $8.9 billion in 2000 and reached an estimated $220 billion in 2012. According to U.S. COMTRADE data, mineral fuels make up the majority of Africa’s exports to Brazil, China and India – 85 percent, 80 percent and 70 percent respectively of imports from Africa.
The increased interest in Africa by investors – both new and old – represents a great opportunity for African countries to solidify the growth experienced in recent years and to invest in the transformation of their economies. However, there are many concerns about the new interest in Africa by countries such as China, Brazil, India and others. One of the most important of these concerns is the view that many of the contracts to exploit natural resources agreed upon between African countries and these new investors are not entered into openly and transparently. In addition, there is fear that some of these new development partners are engaging in practices that are degrading Africa’s environment and its fragile ecosystems. There are also concerns that investment in agriculture involving what are referred to as “land grabs” poses a serious threat to Africa’s precarious food security situation. Other criticisms have been directed at the failure of some investing countries to create jobs for local labor. In fact, many of these countries bring their own workers to their African projects, effectively minimizing their use of domestic labor resources. Finally, some of these investments, especially those made in the exploitation of natural resources, are seen as not contributing to a positive transformation of African economies.
Source: http://news.sudanvisiondaily.com/details.html?rsnpid=232622
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Membership to several blocs hurts trade in EAC – expert
Overlapping membership in several trade areas is impeding “free circulation of goods” within the East African Community-members states, a regional integration and trade expert has said.
Alfred Ombudo K’Ombudo, the Coordinator of the EAC Common Market Scorecard team, has told The News Times that belonging to other trade blocs outside the EAC makes members reluctant to remove internal borders to allow goods to move more freely.
According to K’Ombudo, a Common External Tariff (CET) is critical to ensure free circulation of goods through the application of equal customs duties. The EAC Customs Union protocol has a three-band structure of 0 per cent duty on raw materials, 10 per cent on intermediate goods and 25 per cent on for finished goods.
However, of the five partner states, Tanzania is a member of the SADC and subscribes to a different structure while Burundi, Kenya, Rwanda, and Uganda, are members of the Common Market for Eastern and Southern Africa (Comesa). On the other hand, Burundi belongs to the Economic Community of Central African States (ECCAS).
This, according to the expert is “perforation of the bloc’s CET,” drilling a hole in the regions tariff structure as member- states trade with other countries below the agreed tariffs.
“This makes EAC countries less willing to remove internal borders because they are not sure whether goods may have come from other blocs. This is a serious structural problem that is difficult to solve because the customs union legally recognises other blocs that members belong to,” K’Ombudo noted.
Burundi, Kenya, Rwanda and Uganda’s participation in Comesa and Tanzania’s membership to SADC is recognised by the EAC, but no exception is granted to Burundi for participating in the ECCAS.
Article 37 of the bloc’s Customs Union Protocol recognises other free trade obligations of partner states but it requires them to formulate a mechanism to guide relationships between the protocol and other free trade arrangements.
EAC Secretary General, Richard Sezibera, told The New Times during the launch of the Scorecard in Arusha, that there have been efforts to address the issue of overlapping membership.
“They [EAC leaders] have done two things to [try] addressing it: One is to harmonize the CET of the EAC and that of COMESA. This makes it easier for COMESA states to reduce the level of perforation,” he explained.
He added that in 2008, the heads of state decided to negotiate a free trade area between the EAC, COMESA and SADC as another way of fixing the problem.
Dr Catherine Masinde, the Head of Investment Climate, East and southern Africa at the International Finance Corporation (IFC), said: “If we were not to perforate the EAC would end up with a bigger volume of trade figures”.
She noted that since the launch of the EAC Customs Union, in 2005, the region has witnessed strong growth in intra-regional trade, rising from $1.6 billion to $3.8 billion between 2006 and 2010. Intra-EAC trade to total EAC trade grew from 7.5 per cent in 2005 to 11.5 per cent in 2011.
“This is significant growth but, I am told that this is, in fact, a drop in the ocean. That it is far from the potential of the market. I was given a figure, that $22.7 billion [in inter-regional trade] was actually lost to other regional blocs, from this region, [between 2005 and 2012] because of non-compliance with the common market protocol.”
The Scorecard, Masinde hopes, will solve various EAC compliance issues as well as energize reforms to spur the bloc’s development.
Source: http://www.newtimes.co.rw/news/index.php?a=14521&i=15642
See also: EAC Scorecard to Track Implementation of the Common Market Protocol Launched in Arusha (East African Community Headquarters, 18 February 2014)
Related: EAC scorecard gives top marks to Kenya, Rwanda, Uganda (Guardian on Sunday, 23 February 2014)
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DEAD AID: Why TRADE facilitation is necessary but not AID
Indeed to release the potential of Africa, there is the need to develop means to facilitate trade across the borders and this means major investments in transport infrastructure including roads, ports; internal container depots; inland water ways and railways are needed.
In the post-independence period, trade has being a core element of the development strategy of African countries and despite claiming regional trade as a strategic objective, African countries have yet to reach their trade potential particularly, when it comes to trading with each other.
The importance that African countries attach to regional trade has been reflected in the high number of trade schemes and policies on the continent and this trade agenda is geared towards empowering Africa to take its rightful position in the global economy.
A Continental Free Trade
Free trade is a policy by which a government does not discriminate against imports or interferes with exports by applying tariffs (to imports) or subsidies (to exports) or quotas. According to the law of comparative advantage, the policy permits trading partners’ mutual gains from trade of goods and services.
It is also a means of enjoying goods and services that one has a disadvantage in producing due to the level of discrepancies in resources endowments of various countries. That is, through trade one country can have access to goods and services produced in other countries. Free trade is also a system in which goods, capital, and labor flow freely between nations, without barriers which could hinder the trade process. According to the United Nations Economic Commission for Africa (ECA), only 10% of trades in Africa occur between African countries but stands at 60% with the rest of the world.
The Aid
Whiles trade has been identified as a means of robust economic development, foreign aid is considered by a lot, especially the foreign development partners as the way forward. In the past fifty years, more than $1 trillion in development-related aid has been transferred from rich countries to Africa. But the question is, has this assistance improved the lives of Africans? In fact, across the continent, the recipients of this aid are not better off as a result of it, but much worse.
Total foreign aid to Africa from all sources amounts to a little over 50billion dollars a year, but corruption alone cost Africa 148 billion dollars a year. Has those billions of dollars in aid sent from wealthy countries to developing African nations helped to reduce poverty and increase growth?
Aid to Africa has however become a Band-Aid, not a long-term solution since aid does not aim at transforming Africa’s structurally dependent economies. If donors aim to make long-term sustainable impact, aid should target transcontinental projects such as highways, telecommunications and power plants. Again development aid ‘promotes dependence on others’ as it creates the impression that ‘emergence from poverty depends on external donations rather than on people’s own efforts and motivation, the more reason why Africans should focus on trade and not aid.
It appears as though most African countries are so dependent on aid and that without it almost half of their yearly budgetary commitments cannot be fulfilled. It therefore seems aid is not meant to ensure recipients become self-reliant since if it is the case, powerful states can no longer brag about who is giving more than the other.
Dr. Dambisa Moyo, a global international economist argues in her famous book ‘DEAD AID: why aid is not working and how there is a better way for Africa’ that the notion that aid can alleviate poverty is a myth since ‘aid has been and continues to be, an unmitigated political, economic and humanitarian disaster’ for most developing countries.
She sees the vicious cycle of aid as one that chokes off investment, encourages dependency and facilitates corruption, adding that this cycle ‘perpetuates underdevelopment and guarantees economic failure’ in poor regions. In her book, Moyo also touched on ‘the paradox of plenty’, insisting that aid instigates conflicts in Africa.
If not, how come the same continent that receives the largest amount of aid is the most conflict ridden place in the world? Moyo therefore suggests a low-aid market-based development financing model that encourages trade and investment from both foreign and domestic middle class.
This is her formula: 5% from aid, 30% from trade, 30% from FDI, 10% from capital markets and the remaining 25% from remittances and harnessed domestic savings.
In fact, poverty levels continue to escalate and growth rates have steadily declined and millions continue to suffer.
Provocatively drawing a sharp contrast between African countries that have rejected the aid route and prospered and others that have become aid-dependent and seen poverty increase, Moyo illuminates the way in which overreliance on aid has trapped developing nations in a vicious circle of aid dependency, corruption, market distortion, and further poverty, leaving them with nothing but the ‘need’ for more aid.
Trade
Therefore for Africa to take its rightful position in the world’s global economy, then it must dream of becoming borderless in terms of doing business and not being dependent on aid. If we can create a single economic space, eliminate the regulatory and administrative physical barriers; then we are on the rise of taking our rightful position in the global economy and facilitate our efforts to reduce poverty.
The boosting of intra-African trade requires the adoption and implementation of current trade policies at the national, regional and continental levels, which should be geared specifically towards the promotion of intra-African trade.
For regional markets to operate efficiently there is the need for strong regional and domestic framework regulations on trade related issues of intellectual property rights, competition policies, investment, government’s procurement, trade and the environment. Non-tariff barriers such as staggering transaction cost, complex immigration procedures, limited capacities of border officials, costly import and export licensing procedures and lack of investments in trade association.
Trade is actually an engine of growth and if Africa is to sustain the current growth momenta which currently stand at averagely more than 5%, we should ensure that we increase the volume of trade within the continent.
Africa at the moment is paying up to 40% extra on transport itself of goods at the consumer end. When you look at this cost at the rest of the world it is averaging about 10%. So Africa remains uncompetitive not because of any insurmountable reasons but things that we can remove without additional investments. Studies show that if we remove these types of barriers to trade and have trade facilitation measures, we can have an additional $34billion of trade annually.
This will help Africa’s booming informal trade into the formal economy. This will mean more jobs for Africa’s 400 million young people, increased global competitiveness and less reliance on Western struggling economies and it could mean an end to food shortages across the region where hunger affects nearly 240 million people.
The trade challenges
A number of challenges have been recognized as hampering the continental Free Trade Zone agenda. These include undiversified und underdeveloped production structures, inadequate infrastructure, and prevalence of non-tariff barriers and lack of trade governance structures. Increased intra-African trade will enable the continent create a large market of close to one billion people as well as encourage the diversification of economies. In the post-independence period, integration has being a core element of the development strategy of African countries.
Unclear policies also hamper trade across the continent. For example, goods from Togo may be left at border in Nigeria with the reason that they do not satisfy local requirement. A trader may get his/her grain at the Burkina border only to find out that a ban on exports is imposed. Transport costs are very high. African leaders must implement current policies and existing legislation that help to reduce the challenges hampering trade in Africa.
Studies show that if we remove these types of barriers to trade and have trade facilitation measures, we can have an additional $34billion of trade annually. This will help Africa’s booming informal trade into the formal economy.
Trade facilitation can provide important opportunities for Africa by increasing the benefits from open trade, and contributing to economic growth and poverty reduction. However, the quest for more open trade is not an end in itself but rather driven by the experience that open trade provides more economic opportunities for people.
Producers can offer their goods and services to more customers, and consumers have more choices, lower prices, and access to innovations. Open markets increase prospects of producing and selling new ideas and products locally, regionally and in global markets, which leads to more income opportunities and the improvement of living standards on the continent. Africa needs Trade not Aid.
Paul Frimpong, a Chartered Economist (ACCE-Global), writes on the macro-economy and global affairs. He is also an African Affairs Analyst and Emerging Markets Strategist.
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G20 finance ministers agree global growth target of two percentage points
Ministers fail to outline a clear plan to achieve the target – which amounts to about $2tn – or consequences for missing it
The G20 nations will aim to increase global growth by at least two percentage points over the next five years, but are yet to endorse a clear action plan to achieve the target.
G20 finance ministers and central bank governors set the growth goal, an ambition that translates to about $US2tn in economic activity, after two days of meetings in Sydney.
In an acknowledgement of concerns about the impact of the US Federal Reserve’s tapering program, the official communiqué said all central banks “maintain their commitment that monetary policy settings will continue to be carefully calibrated and clearly communicated”. Central banks are urged to be “mindful of impacts on the global economy”.
Host nation Australia had been pushing for ambitious global goals to increase economic growth.
The communique, published on Sunday, says there is “no room for complacency” and the G20 nations commit to develop new measures to foster growth.
“We will develop ambitious but realistic policies with the aim to lift our collective GDP by more than 2% above the trajectory implied by current policies over the coming five years,” the document says.
“This is over US$2tn more in real terms and will lead to significant additional jobs. To achieve this we will take concrete actions across the G20, including to increase investment, lift employment and participation, enhance trade and promote competition, in addition to macroeconomic policies.”
But detailed plans to achieve the growth are yet to be enunciated.
The Australian treasurer, Joe Hockey, who hosted the weekend meeting, hailed the agreement to set a clear global growth target as significant.
Hockey said each country would take its plan for contributing to the global growth target to the G20 leaders’ summit in Brisbane in November.
“We are absolutely committed to working together to deliver on our ambition to lift the world’s economy by at least 2% of GDP over the next five years, thereby creating tens of millions of new jobs,” he said.
Hockey signalled that each country’s contribution to the target would vary, saying it was a combined goal. The G20 did not engage in “central planning” of individual economies, he said.
Asked to explain any consequences if the growth target was not achieved, Hockey said: “If we don’t achieve it there’ll be fewer jobs created and less economic growth and less prosperity; it’s as simple as that.”
The IMF managing director, Christine Lagarde, welcomed the meeting’s focus on growth as its “rallying factor”.
She said predicted hostility between advanced and emerging economies, particularly over the effect of US tapering, had not eventuated.
Lagarde said the IMF stood ready to provide support to Ukraine following days of political turmoil. She said this could include policy advice and financial assistance, but she pointed to potential negotiating complications as a result of the leadership upheaval.
“We need to have somebody to talk to because any discussions takes two: the IMF on the one hand, the representatives of a country on the other,” Lagarde said.
The UK chancellor, George Osborne, had called on the G20 to send a strong message that financial support would be available to help the people of Ukraine rebuild their country. Before the meeting Osborne also backed Australia’s push for commitments to lift global economic growth.
The US treasury secretary, Jack Lew, said the decision to focus on growth strategies was important because it was a “shared objective”. Lew contrasted the discussion with past debates over austerity measures.
“It’s in all of our interests and that’s why there was such a consensus in the discussions this weekend,” he said.
Lew said the US president, Barack Obama, would soon outline growth plans in his new budget. The elements were “not going to be a surprise”. They would include infrastructure projects to create “a lot of good middle-class jobs” and a foundation for economic growth.
Lew said the US also welcomed the G20 finance meeting’s agreement to move forward on tax co-operation.
The communique commits to a global response to base erosion and profit shifting, endorsing the common reporting standard for automatic exchange of tax information. Implementation details are expected to be fleshed out later this year.
The meeting also raised concern over lack of progress on reform of the International Monetary Fund (IMF).
G20 countries “deeply regret” that IMF quota and governance reforms agreed to in 2010 had not yet become effective, the communique said. It urged the US to ratify the reforms by April.
Lew said the US government would work with Congress to secure passage of the IMF reforms.
The IMF’s latest forecasts point to global growth of 3.7% this year and 4% in 2015.
An IMF report prepared for the G20 meeting says the recovery from the great recession has been disappointing, but outlines suggested strategies to raise world real GDP by about 2.25% in 2018. Actions would include product market reforms to increase competition and improve the business environment; reforms to increase labour market participation; and infrastructure investment.
The meeting welcomed recent signs of improvement in the global economy, in particular, growth strengthening in the United States, United Kingdom and Japan alongside continued solid growth in China and many emerging market economies, and the resumption of growth in the euro area.
But the communique said the global economy “remains far from achieving strong, sustainable and balanced growth”. It pointed to weaknesses in some areas of demand, recent volatility in financial markets, high levels of public debt, continuing global imbalances and remaining vulnerabilities within some economies.
The G20 economies committed to creating a climate that encouraged higher investment, particularly in infrastructure and small and medium enterprises.
The Australian prime minister, Tony Abbott, has vowed to use the nation’s presidency of the G20 to strike agreement on concrete actions to increase economic growth, lift employment and promote infrastructure investment. He has previously indicated that the G20 meeting of world leaders in the Queensland capital of Brisbane in November would focus on a commitment “to take practical action”.
By the time of the Brisbane summit the G20 aims to “substantially” complete core reforms set out in response to the global financial crisis, including building resilient financial institutions, ending “too big to fail”, addressing shadow banking risks and making derivatives markets safer.
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Rob Davies on the Special Economic Zones Bill 2013
Address by the Minister of Trade and Industry, Dr Rob Davies to the National Council of Provinces (NCOP), on the Special Economic Zones Bill 2013
18 February 2014
The Special Economic Zone (SEZ) Bill that is being tabled today aims to support a broader-based industrialisation growth path for our country, balanced regional industrial growth, and the development of more competitive and productive regional economies with strong up and downstream linkages in strategic value chains. Adoption of this Bill will be a significant milestone in pursuit of the aspirations expressed in the National Development Plan (NDP), New Growth Path (NGP) and Industrial Policy Action Plan (IPAP).
SEZs are defined as geographically designated areas of a country set aside for specifically targeted economic activities, supported through special arrangements and systems that are often different from those that apply in the rest of the country.
Preceding the SEZ Bill, the department of trade and industry (the dti) initiated the Industrial Development Zone (IDZ) programme under the Manufacturing Development Act (MDA) in 2000. The focus of the IDZ programme was largely to attract foreign direct investment, increase exportation of value added manufactured products and creates linkages between domestic and zone based industries. To date five IDZs have been designated (i.e Coega; East London, Richards Bay, OR Tambo and Saldanha Bay), with the newly designated Saldanha Bay in October 2013. Honourable speaker, I can confidently indicate to this house that there are already eight investors in the Oil and Gas sector that are signing to invest at Saldanha Bay IDZ. Three of the five IDZs in Coega, East London and Richards Bay are fully operational. Whilst these have achieved some major successes, 42 operational investments worth R4bn and created over 5,000 direct jobs and 43,000 construction jobs), some weaknesses on the implementation were identified during IDZ policy review, which include:
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weak governance,
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lack of IDZ incentives,
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poor stakeholder co-ordination, and
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lack of integrated planning.
Most importantly the criteria for IDZ designation were biased towards the development of coastal regions and ignored economic potentials existing in the inland regions; IDZs by nature are export oriented and vicinity to the sea or airport becomes strategic for logistics purposes. Due to the identified weaknesses above, the programme could not assist the country to unlock the long term development potential of all regions and reverse the process of economic marginalisation and perpetuation of spatial inequalities.
Confronted with these challenges (especially, the concentration of economic activities around metropolitan areas in three regions, namely Gauteng, KwaZulu-Natal and Western Cape), including economic crisis that started in 2008, the dti recognised that measures responding to both global and domestic economic conditions require a focus on new sources of competitiveness that lie in innovation and productivity, with an entrenched base in skills, infrastructure and efficient responsive state action, that is, more versatile policy instruments.
the dti has therefore identified SEZ programme as one of the appropriate mechanisms that will contribute towards the realisation of economic growth and development goals as envisaged in the IPAP, NGP and NDP. Besides the SEZ Bill serving as an enabler for the government to effectively regulate all SEZs including IDZs which are one category of SEZ, it also proposes an internationally competitive SEZs value proposition that would assist in attracting both domestic and foreign direct investments into the zones. The intention is that industrial production in the SEZs will focus on the manufacture of value added goods. Once designated, it is expected that each SEZ will have strong backward and forward linkages with other sectors in its locality building and strengthening localisation through supplier development programmes – a departure from the traditional SEZ model where you had SEZs as separate enclaves.
The Special Economic Zones Bill
As indicated above, Special Economic Zones are just one of many policy tools available to Government in its drive for increased industrialization. SEZs offer a potentially valuable tool to overcome some of the existing constraints to developing industrial capabilities, attracting investments and growing exports. The aim of the SEZ Bill seeks to boost private investment (domestic and foreign) to labour-intensive areas to increase job creation, competitiveness, skills and technology transfer and exports of beneficiated products.
The Bill builds on the experience that we have gained from the IDZ programme and introduces a number of new measures that take into consideration inputs by the general public and social partners at NEDLAC. The SEZ Bill thus provides for the:
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Designation, promotion, development, operation and management of SEZs,
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Determination of SEZ Policy and Strategy,
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Establishment of SEZ Advisory Board and SEZ Fund,
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Regulatory measures and incentives for SEZs to attract domestic and foreign direct investment, and
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Establishment of a single point of contact or One-Stop Shop to deliver government services.
The Bill introduces a variation of Special Economic Zones, to cater for the various socio-economic and regional/spatial planning considerations of the various spheres of government at local, provincial and national level. In particular, the SEZ Bill provides for the designation of the following types of SEZs:
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Free Ports: Duty free areas adjacent to a port of entry where imported goods may be unloaded for value-adding activities, repackaging, storage and subsequent re-export, subject to special customs procedures
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Free Trade Zones: a duty free area offering storage and distribution facilities for value-adding activities within the Special Economic Zone
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Industrial Development Zone: A purpose built industrial estate that leverages domestic and foreign fixed direct investment in value-added and export-oriented manufacturing industries and services
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Sector Development/Specialised Zones: A zone focused on the development of a specific sector or industry through the facilitation of general or specific industrial infrastructure, incentives, technical and business services primarily for the export market
By making it possible to have different categories of Special Economic Zones we aim to address the previous challenges experienced within the IDZ Programme, allowing for tailoring of the individual SEZ’s Strategies, to fit with its individual needs and demands.
The Public Consultation Process
The SEZ Bill consultative process started in 2010 with all relevant stakeholders across three spheres of government and State Owned Enterprises, including National Treasury, SARS, NEDLAC and Business community.
MINMEC granted approval for the SEZ Bill and policy to be submitted to Cabinet in August 2011 and Cabinet approved the Bill for public consultation in December 2011. NEDLAC consultative process was finalized in October 2012 and the Bill was introduced to Parliament in March 2013.
The Parliamentary Portfolio Committee on Trade and Industry (‘the Portfolio Committee’) invited written submissions from stakeholders. Submissions were received from Business Unity South Africa (BUSA), the Centre for Development and Enterprise (CDE), the Chemical and Allied Industries’ Association (CAIA), the East London Industrial Development Zone (ELIDZ), the Free Market Foundation (FMF), the Minerals Processing and Beneficiation Industries Association of Southern Africa (MPBIASA), Mr Paul Hjul, and the Richards Bay Industrial Development Zone (RBIDZ).
Some of the issues addressed, which have further been elucidated on and addressed in the Bill, include the following:
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Defining the composition and nature of the Special Economic Zones Advisory Board (the SEZ Advisory Board), term of office of members and removal of SEZ Advisory Board;
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Describing roles and functions of and the relationship between the various structures created in the Bill;
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Clarifying how the one-stop-shop will operate in order to streamline approval processes and reduce red-tape;
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Providing for a public consultation process prior to the Minister making certain decisions; and
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Explaining details on the IDZ transitional arrangements.
After the Portfolio Committee supported the Bill, it was then tabled at National Assembly where it was supported and referred to the National Council of Provinces for concurrence. Through the NCOP, the Bill was presented to eight out of nine provincial legislatures and at 16 provincial public hearing meetings. The Bill received an overwhelming support from the provinces and society at large. The level of support accorded to the Bill by all parties involved is a clear indication that South Africa wants to realise a higher industrial path and improvement of livelihood of its citizens.
The uniqueness of Special Economic Zones
The above consultation processes resulted into an improved formal regulatory framework supporting the SEZ programme. Furthermore, extensive regional and international benchmark studies were conducted to determine the appropriate support measures for the SEZ Programme that would allow for South Africa to compete in the international SEZ environment.
The following support measures were put in place to enhance the South Africa’s SEZ value proposition including:
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A broader SEZ Incentives Strategy: Allowing for 15% Corporate Tax, Building Tax Allowance, Employment Tax Incentive, Customs Controlled Area (VAT exemption and duty free) and Accelerated 12i Tax Allowance.
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An Enhanced Funding Strategy: Including a comprehensive SEZ Fund, Mix of funding instruments, PPP arrangements, etc.
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Infrastructure Strategy: Accommodation of bulk infrastructure requirements by government through the SEZ Fund, greater SEZ location considerations, greater involvement of various stakeholders’ roles in providing infrastructure in and out of zone,
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Skills & Supplier Development: Skills development strategies and frameworks for SEZs are being formulated jointly by the dti and relevant international experts and national authorities. These include Supplier development programmes to develop our local businesses in and around SEZs, as well as continuous training of civil servants on SEZ in partnership with Chinese and other international partners.
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One Stop Shop (OSS) Strategy: To reduce bureaucracy and red tape (cost of doing business) of government approvals and applications processing, a single point of investor contact will be implemented within each SEZ. This OSS platform aims to reduce information search & transaction costs for investors locating within SEZs, to facilitate permits & licences for investors, to reduce steps in approvals, and to provide a more effective and sustainable investor after care service. The dti is in the process of finalising the One Stop Shop Delivery model that will see the roll out soon.
Conclusion
As alluded to above, the dti has consulted broadly with the general public since 2010, with provincial departments responsible for economic development under the auspices of MIN-MEC and provincial legislatures; various national government departments including National Treasury, SARS and the Economic Development Department; existing Industrial Development Zones; and municipalities represented by the South African Local Government Association (‘SALGA’) at meetings of MIN-MEC; including Eskom, National Planning Commission, Industrial Development Corporation and Development Bank of Southern Africa.
The SEZ tax incentives offering that have already been pronounced by the Minister of Finance will ensure that we are able to provide an investment environment that competes effectively with other locations in the world. The incentives will become effective, upon enactment of the SEZ Bill.
the dti is currently preparing for the implementation of the SEZ Bill by consulting with all the provinces in identifying the potential SEZs. As a result, together we have commissioned pre-feasibility and feasibilities studies in the various provinces. The designation of new SEZs will take place once the new SEZ Act and Regulations are in place.
It is thus imperative that the SEZ Bill is expediently considered in order to take advantage of this huge imminent interest and opportunity. This house’s support for the SEZ Bill would be greatly welcomed.
I would like to express my sincere appreciation to the Select Committee on Trade and International Relations and the Provinces that has tirelessly worked on the SEZ Bill and ensured not only that it is completed within a short space of time, but ensured that a good quality Bill comes out of its process. The Committee’s contribution in this regard has been invaluable. My thanks also go to the dti team for their hard work.
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Kenya to lose export edge if new EPA delays, says EU
Kenya could lose more than other East African Community member states if the trade bloc does not sign a new Economic Partnership Agreement with the European Union.
The EU delegation to Kenya yesterday said it is upon the country to marshal support for the international free trade treaty, whose signing should be concluded by October 1 to retain competitiveness of its exports.
Outstanding issues on the EPA include clauses providing for ‘most favoured nation’, export taxes, and non-execution. “These are the ones requiring political will, as well as the constellation of EAC states, each of which is sovereign, making it more of structural negotiation to ensure convergence,” said Lodewijk Briët, ambassador and head of EU delegation to Kenya.
“We need to realise that by now there’s a strong political impetus to conclude the EPA negotiations,” he said. The EPA is expected to provide free market access and co-operation support between the two trade blocs. Trade liberalisation will have to be compatible with the World Trade Organisation’s rules. Presently, Kenya exports to the EU under the Market Access Regulations since 2007, but this will be repealed on October 1.
Kenya is categorised as a developing country, while Uganda, Rwanda, Burundi and Tanzania are considered Least Developed Countries. The LDCs will continue to gain favourable access to the EU market under the ‘Everything But Arms’ scheme, which grants ‘duty-free, quota-free’ access to imports of all their products.
Tariffs will be hiked in October, with flower exports attracting a duty of 8.5 per cent, which will make them uncompetitive against other exporters such as Colombia.
“The purpose of these negotiations was to sign the EPA between regions. Kenya cannot therefore sign separately … the EAC rules do not allow that,” said Christophe De Vroey, the trade and communication counsellor at the EU delegation to Kenya.
“If we sign the agreement before October 1 … we will apply the tariffs but possibly refund once ratification is concluded,” said De Vroey. The EU is a 28-member states trade bloc, offering access to a potential 0.5 billion consumers. The region makes up Kenya’s biggest export destination, taking up loads of cut flowers, French beans, coffee and tea, fruits, fish and textiles.
“What we (EU) stand to lose is in terms of quality and the comprehensiveness of our relations. The longer these negotiations drag on, the stronger the trade erosion that occurs,” said Briët.
According to the delegation, 23 per cent of Kenya’s exports – worth Sh110 billion – went to the EU. EPA negotiations have been on-going for 12 years now, initially dragged by “lack of political will”.
“Time is of essence. We must provide certainty and predictability to operators and potential investors. Economically, ambiguity is the worst enemy of investment and growth,” the delegation said.
EAC states will be expected to open up their markets gradually to EU imports – phasing out duties – over 20 years to 2033 if the EPA is concluded this year.
While EAC exports are expected to have 100 per cent access to the EU market, the latter will be allowed access of up to 83 per cent of the EAC trade bloc. About 17 per cent of EU goods are labelled ‘sensitive’ and will continue to taxed to avoid “undue competition”.
Source: http://www.the-star.co.ke/news/article-155743/kenya-lose-export-edge-if-new-epa-delays-says-eu
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China-Africa trade exceeds $200 billion
China-Africa trade totaled more than $200 billion last year, Chinese President Xi Jinping said Thursday, highlighting the Asian powerhouse’s burgeoning trade and investment ties with the continent.
“In 2013, Chinese-African trade surpassed the $200 billion mark for the first time, making China Africa’s biggest trading partner,” Xi told visiting Senegalese President Macky Sall, adding that Chinese direct investment in Africa grew 44 percent.
“That all stands witness to the endlessly renewed vitality of Sino-African friendship, to the scale of the potential for co-operation and the excellent outlook for the new kind of Sino-African strategic partnership,” Xi said at Beijing’s Great Hall of the People.
Xi did not give an exact total.
But China-Africa trade has boomed in line with the Asian country’s rise to become the world’s second-biggest economy, which has been accompanied by a thirst for African natural resources to help fuel its growth.
Underscoring the continent’s importance, Xi visited Tanzania, South Africa and the Republic of Congo as part of his first overseas tour after he become president in March last year.
But China’s growing role has also sparked tensions in some countries.
In February last year, for example, the Zambian government seized control of a Chinese-owned coal company due to poor compliance with safety and environmental standards, its mines minister said. In 2012 workers at the mine killed a Chinese manager during rioting over work conditions.
Acclaimed primatologist Jane Goodall told AFP in a recent interview that China was exploiting Africa’s resources just as European colonizers did, with disastrous effects for the environment.
Related news story: China, Senegal decide to build long-term partnership (Xinhua, 20 February 2014)
Source: http://www.arabnews.com/news/528746
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South Africa, Africa and International Investment Agreements
Remarks by Dr Rob Davies at the Centre for Conflict Studies Public Dialogue
Cape Town, 17 February 2014
At the outset, let me thank the Centre for Conflict Studies and its Director, Dr Adekeye Adebajo, for convening this public dialogue on what is clearly an issue of growing international and national interest.
I want to congratulate the Centre for organizing the Seminar on International Investment Agreements and thank all the distinguished participants for their attendance, particularly those who have travelled from outside South Africa to be here. I am informed that this two-day Seminar, which started today, has already engaged in good discussion and addressed many of the questions I will raise in my remarks.
In my comments today, I want to touch on South Africa’s longstanding policy approach to foreign direct investment (FDI); our concerns with international investment agreements; and, in light of this, the work the South African Government currently undertaking in this important area. I will conclude with some comments for future work in this area.
To provide some context, I begin by recalling the South African Government’s commitment to an economic development strategy that will accelerate growth along a path that generates sustainable, decent jobs in order to reduce the poverty and the extreme inequalities that characterise our society and economy.
Download the full speech here.
See also: Investment bill ‘adds to uncertainty’ in SA (BDlive, 18 February 2014)
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Five questions answered on Africa’s rising economic growth
There has been a lot of talk about Africa’s rising economic prosperity and whether it is sustainable and deeply rooted in reducing extreme poverty across the continent. So, I sat down to answer some basic fundamental questions that I often get asked about Africa’s growth and development.
Why does Africa show the highest growth prospects out of any continent in the world?
There is no doubt that favorable commodity prices have and will be a key driver of growth for sub-Sahara Africa. The so-called commodity super-cycle has benefited traditional oil exporters, such as Nigeria and Angola, and new ones, like Ghana. Demand for natural resources from emerging markets, especially China, has increased in the last decade and remains important. As noted in the BP Energy Outlook 2035, Africa will remain an important producer of oil and natural gas, accounting for 10 percent of global oil and 9 percent of natural gas production in 2035.
In addition, the continuation of good medium-term policies and structural reforms bodes well for future growth in the region. Africa has “democratized” to some extent, and violence and armed conflicts have decreased in spite of a few hot spots. Half of the world’s future population growth will be driven by Africa (not because of higher fertility, which is declining, but because of longer life expectancy). This trend could lead to a “demographic dividend” of an adult population of 800 million by 2030 (compared to 460 million in 2010). Africa’s rapid urbanization and burgeoning middle class could generate hundreds of millions of consumers.
To sustain its growth, however, Africa will need to continue reducing poverty and inequality, and step up the transformation of its economy. As noted by Dani Rodrik, African countries, unlike East Asian countries, have not yet been able to turn their farmers into manufacturing workers, diversify their economies, and export a range of increasingly sophisticated goods. Moreover, many African countries are joining the resource-rich country club and with it come not only opportunities but also challenges. Good governance will be needed to enable future generations of Africans to benefit from this new wealth. Low global interest rates and high commodity prices have opened a window of opportunity for African countries to reform. This window will not always remain opened, and reform is needed now.
What role does China play in Africa’s economic development?
China’s economic performance shows that a transformational agenda can succeed and lift a large segment of the population out of poverty. Beyond being a benchmark, China has become the largest single trading partner for sub-Saharan Africa, with a 17 percent share of total trade. In comparison, India has a 6 percent share and Brazil, a 3 percent share. The so-called Group of Five (Indonesia, Malaysia, Saudi Arabia, Thailand and the United Arab Emirates) accounts for only 5 percent of sub-Saharan Africa’s total trade.
China also accounts for 16 percent of total foreign direct investment to sub-Saharan Africa and has become a key investor and provider of aid. There is no doubt that China is interested in Africa’s natural resources (such as copper in Zambia and oil in Nigeria and Sudan), but it is expanding its focus. Over 2,000 Chinese enterprises are investing and developing in more than 50 African countries, and South Africa is the leading recipient of Chinese foreign direct investment.
The key advantage of China in Africa is speed. Chinese firms are able to deliver quickly and work in close coordination with their financial and other national partners. Speed is a big comparative advantage in Africa. For instance, the continent has large infrastructure needs and African policymakers are under pressure to deliver. They are tempted to agree to an offer to build a coal-generated power plant in a couple of years when their population and businesses are getting increasingly disgruntled by sometimes daily power outages. They agree to this at the expense of adopting less polluting technologies.
What are the African countries to which we should being paying close attention?
South Africa has always been a key recipient of foreign investment given the sophistication of its economy.
In addition, natural resource-rich countries in Africa such as Angola and Nigeria will remain a key destination of foreign investment, especially given that the number of resource-rich countries will only increase with recent advancements in offshore oil exploration and extraction. In fact, Japanese Prime Minister Shinzo Abe recently visited Mozambique to secure natural gas contracts. Countries in the East African Community, such as Kenya, Uganda and Tanzania, are now discovering oil. Metal-exporting countries such as Burkina Faso, Ghana and Tanzania are also attractive.
As a non-natural resource-rich country, Ethiopia has a large population of more than 80 million people, high GDP growth, and a government-led strategy to attract foreign investment in some sectors. Rwanda is a smaller economy but it is growing rapidly and is trying to leverage its membership to the East African Community. In West Africa, Côte d’Ivoire is fast recovering from armed conflict, and Ghana remains a darling of foreign investors.
What are key areas of opportunity to capitalize on for Africa’s development?
Large infrastructure projects in Africa need foreign partners. Infrastructure spending in Africa is estimated to reach $93 billion per year, and tax revenues and other domestic resources will not be enough to fill the financing gap for infrastructure projects.
Information and communications technology (ICT) needs remain high in spite of the rapid growth in mobile phones and mobile banking. Major companies, including Google, Microsoft, Huawei and GE, are betting on the continent and investing in research and development.
The rising African middle class is also attracting investors in the retail sector. For instance, French supermarket chain Carrefour and American big box store Walmart have expanded their operations to Africa. Banking is also attractive given the low financial depth in Africa. Foreign investors are now innovating to focus on urban centers with a high potential for consumer spending. In 2020, the household spending of Alexandria, Cairo, Cape Town, Johannesburg and Lagos will total $25 billion dollars.
One untapped area is agriculture for major investment. Africa has about half of the planet’s arable land and there are potentially large expected returns from this sector, especially if its infrastructure gap is reduced.
Finally, portfolio investments in equity markets, domestic bond markets, and Eurobond markets are increasing and private equity firms are increasingly investing in the region. In 2013, the MSCI African Frontier Market (equity) index was up 28.5 percent and $10.7 billion of sovereign bonds were issued by capital markets in Africa. There are now five times more sovereign ratings in Africa than there were in 2000.
Is the whole continent progressing or are only a few countries?
The extent to which overall growth is shared by the 54 countries in Africa is quite impressive. This being said, some trouble spots remain. While some fragile countries like Liberia, Sierra Leone and especially Rwanda have been able to move forward from unfortunate legacies of violence and in some cases even genocide, the situation in other countries is worsening, particularly in the Central African Republic and South Sudan (which is oil-rich). In spite of recent progress, the situation also remains fragile in the east of the Democratic Republic of the Congo and in Mali, and press reports often remind us of the piracy situation in Somalia’s Gulf of Aden and terrorist acts by al-Shabab. Even in the north of Nigeria there is violence attributed to Boko Haram as well as piracy in the Gulf of Guinea. There is a need to build an African-owned framework and response mechanism to prevent and resolve violent conflict and crises in the continent.
African efforts to increase economic integration are helping to strengthen regional growth as well. Economic and trade integration across Africa will help foreign investors access larger markets and reduce transaction costs, including costs associated with regional infrastructure projects. African countries are trying to strengthen regional integration through regional economic communities and are negotiating free trade agreements and customs unions with the goal of ultimately having common currencies. We are far from one common African currency for the continent but we are beginning to some steps forward in this area. The East African Community – which includes Burundi, Kenya, Rwanda, Tanzania and Uganda – is a market of 150 million people and is set to become a monetary union soon. The former French colonies in Africa all use the same currency, which is pegged to the euro and have common institutions.
What is striking is that there is a consensus in African policy circles that we are witnessing Africa’s moment. The challenge will be in implementing the policy roadmap quickly as there is little time left for transformation. The World Bank notes that half of the region’s population is under 25 years of age. Each year between 2015 and 2035, there will be 500,000 more 15-year-olds than the year before. The challenge will be to transform this youth bulge into an opportunity.
Amadou Sy is a senior fellow in the Africa Growth Initiative and currently serves as a member of the Editorial Board of the Global Credit Review. His research focuses on banking, capital markets, and macroeconomics in Africa and emerging markets.