tralac’s Daily News Selection
Kenya: Draft Investment Policy (GoK)
Up to now, Kenya has not had a single and clearly defined policy solely focusing on investment generation and retention. The Government of Kenya has however formulated various strategies and policies that focus on investment growth and support, stipulated in various policy documents such as National Development Plans, Sessional Papers and Master Plans, including the new Constitution 2010. These programs and initiatives have had limited impact. They also led to the adoption of various fiscal and non-fiscal incentives, changes in investment related regulations and the creation of several government agencies tasked with responsibility for investment promotion and facilitation, some with overlapping mandates leading to duplication of efforts and unnecessary strain on limited government resources.
To address the limited impact of investment and a number of other challenges relating to the entry and treatment of investment, the Government developed the Kenya Investment Policy. The policy development process took a holistic approach to gain an understanding of Kenya’s context as well as international best practices to inform the policy’s proposals. The policy is guided by six core principles, which emphasise the need for openness and transparency, inclusivity, sustainable development, economic diversification, domestic empowerment, and global integration. The KIP addresses private investments at the national and county levels. It is a comprehensive and harmonized policy to guide attraction, facilitation, retention, monitoring and evaluation of private investment. [Download: Revised Draft, 21st June 2017 (pdf)] [Related: Ease of Doing Reforms Presentation, 19 June 2017 (pdf)]
The report (pdf), produced by BCtA with support from Sustainable Inclusive Business Kenya, outlines key opportunities and challenges facing inclusive businesses in Kenya, and makes recommendations on key improvements needed to enable these models to grow, such as more supportive regulations, better coordination between educational institutions and the private sector to ensure students are work-ready upon graduation, and improved coordination between development actors and businesses to reduce duplication of efforts and ensure sustainability of interventions, particularly in relation to skills building.
However, recently Nigeria’s influence in ECOWAS began to wane as a result of lackadaisical foreign policy. Although Abuja hosts the Commission, fundamental decisions are often taken without Nigeria’s leadership input, or with very inconsequential contributions by some Nigerian apparatchiks. This was evident from the absence in Monrovia of any Nigerian government official in a high leadership position. If President Muhammadu Buhari couldn’t attend on health grounds, and the Acting President because of the likely political implications of leaving the country in the absence of the President, why couldn’t the Foreign Minister or the Minister of State for Foreign Affairs represent Nigeria? This was the first time such a thing has happened in the 42 years’ history of ECOWAS. Sadly, this was a Summit in which the Heads of State in attendance took some critical decisions, which if upheld would seriously harm our national interest! [The author, M.K. Ibrahim, is a retired Nigerian ambassador], [Acting President Yemi Osinbajo: We can build a new Nigeria; A response: Jibrin Ibrahim]
SACU Heads of State and Government: summit communiqué
The Summit commended the Council of Ministers for establishing two Ministerial Task Teams on Trade and Industry, and on Finance, including the approval of their Terms of Reference, to facilitate the urgent implementation of the Work Programme. The Summit emphasized that SACU economies experience similar economic challenges, which can be better dealt in an integrated manner within the region. In this regard, the Summit directed the Ministerial Task Teams to prioritize industrial development and develop concrete cross-border projects to promote industrialization to ensure that the region is able to optimise economic benefits to withstand global economic shocks. The Summit noted and endorsed the Work Programme, based on the outcomes of the 3rd Ministerial Retreat, which outlines detailed activities, key deliverables and the timelines within which the proposed activities will be undertaken. The following is a summary of the main focus areas of the Work Programme: [Swaziland Observer: 2-year wait for revenue sharing review]
Business advice for US companies in Africa: do what you do best (Newsweek)
Rather than competing in areas like transportation infrastructure or manufacturing, where they are at a competitive disadvantage, American firms need to double down in the sectors in which the US dominates globally - consulting, finance, data, entertainment and agricultural technology. As African businesses grow increasingly sophisticated, American expertise in both finance and professional services can help them grow and navigate the challenges that complexity brings. To deepen the American presence in African markets - particularly the nearly 28 million American SMEs that provide the bulk of American jobs - there must be targeted sectoral policies to help them unleash their power and reach their potential. Using US government outreach programs in the Department of Commerce and the Small Business Association to ensure that SMEs are aware of African opportunities is a good place to start. Funding the Overseas Private Investment Corporation and Export Import Bank, which support American businesses abroad, is also critical. [The author, Aubrey Hruby, is co-founder of the Africa Expert Network and co-author of The Next Africa] [A reminder: Anthony Carroll’s testimony on US interests in Africa]
Kagame stands firm, Kenya retreats in US used clothes row (The EastAfrican)
The EastAfrican has also learnt that the EAC secretariat has already completed its study on how the phase-out of importing used clothing will be implemented. “A meeting is slated for later this month in Arusha, where this will be the main agenda. We will also meet to discuss and approve a detailed plan on how the region’s textile and leather industry is to be developed so as to be self-sustaining,” a source told The EastAfrican.
(i) Malawi: This Country Evaluation Brief reviews and synthesises findings from a selection of evaluations and reports on development interventions in Malawi produced mainly since 2010. None of the evaluations and reports can demonstrate that donors have been able to make significant changes at the political system level. Donor support to good governance and government efficiency has not transformed Malawi politics into an effective instrument of service delivery, strategic policy formulation, and efficient implementation of development-oriented policies. [The analyst: Inge Amundsen]
(ii) Somalia: Progress on the political and security fronts since 2012 has led to substantial increases in development aid, exemplified by the adoption of the Somali Compact in 2013. Total aid flows are ten times the level of government’s own resources, three times higher than any other country. Yet Somalia still receives less development aid per person than many other post-conflict countries. General lessons for donors from this review include: [The analysts: Marcus Manuel, Raphaelle Faure, Dina Mansour-Ille]
Rwanda: Financing manufacturing (SET)
The report aims to analyse Rwanda’s financial backdrop, and the composition of its investment flows into manufacturing, with a view to exploring constraints and opportunities in manufacturing. In analysing financial and economic challenges, this paper concludes that high transport and utility costs, the elevated real effective exchange rate and weakness in bank lending are key challenges to be tackled. Looking ahead, special economic zones should continue to be a focus alongside export-oriented investments; prudential measures could target manufacturing finance and disincentivise overly high levels of real estate lending. [The analysts: Linda Calabrese, Phyllis Papadavid, Judith Tyson]
Tanzania: White elephants under spotlight (Daily News)
President John Magufuli has expressed anger towards individuals who rushed to purchase industries and other parastatal firms, promising to develop them but ended up abandoning them. Now, the President wants all of them repossessed before giving to other individuals who are willing and ready to develop them. According to the President, there were 197 industries sold to individuals for the purpose of developing them. But, survey and investigations conducted revealed that some of them were rendered redundant or had their original purposes changed. The President intoned that all individuals who either abandoned the industries they bought or changed their original purposes were curtailing his government’s industrialisation drive.
A new UK policy on trade and development post-Brexit: a good first step (Center For Global Development)
But we can do even better for the world’s poorest and help our own people too. Here are some ways we would like to see the British government build on this welcome first step. [The analysts: Owen Barder, Ian Mitchell]
Matchmaking finance and infrastructure (HuffPost)
The world economy – and emerging market and developing economies in particular – display a gap between infrastructure needs and its finance. On the one hand, infrastructure investment has fallen far short of what would be necessary to support potential growth. On the other hand, abundant financial resources in world markets have been facing very low and decreasing interest rates, whereas opportunities of higher return from potential infrastructure assets are missed. Here we approach how a better match between private sector finance and infrastructure can be obtained if properly structured projects are developed, with risks and returns distributed in accordance with different incentives of stakeholders. [The analysts: Otaviano Canuto, Aleksandra Liaplina]
BRICS Ministers of Agriculture: joint declaration (China MOA Information Office)
We are committed to agricultural product safety and quality through the implementation of international standards developed by international standard-setting bodies in the sanitary and phyto-sanitary and technical barriers to trade issues, such as the Codex Alimentarius, OIE and IPPC. We are committed to expanding the trade of crops, livestock, fisheries and particularly agricultural products with high added value. We also welcome suggestions from the business fora to governments in order to enhance trade and improve investment environment. We will promote in-depth cooperation in agricultural investment. Recognizing the broad prospects for cooperation in the comprehensive development of agricultural products, farming and transportation infrastructure, and the establishment of agro-trade zones and logistics centers, we will promote in-depth agricultural cooperation between BRICS and other countries.
The Global Blue Economy Partnership Forum will be launched to promote new concepts and best practices of the blue economy, and to boost marine industrial integration and capacity cooperation. Efforts will also be undertaken to jointly develop international blue economy classification standards, and to release reports on blue economy development. Ocean-related public finance products will be explored to support the development of the blue economy. Cross-border marine spatial planning for blue growth will be promoted, common principles and technical standards implemented, and best practices and evaluation methods shared. China is willing to provide technical assistance in marine spatial planning for countries along the Road, and to jointly build an international forum on marine spatial planning. [Nigeria: Maritime transport policy underway]
Today’s Quick Links:
The Incubator for Integration and Development in East Africa (IIDEA) has been launched in Bujumbura. Download the concept note.
Lake Victoria Basin Commission: update
Beyond income poverty: World Bank report on non-monetary dimensions of poverty in Uganda