tralac’s Daily News Selection – a WEF special focus
Today’s profiled WEF session: Achieving a single market in Africa
Africa needs to create 18 million jobs each year to 2035 to accommodate young labour market entrants. What role can the newly ratified African Continental Free Trade Area play to address the opportunities and challenges to generating inclusive growth? Speakers: Bernard Gautier, Akinwumi Ayodeji Adesina, Arancha Gonzalez Laya, Emmanuel Gamor, Winnie Byanyima, Rob Shuter.
WEF reports, news items, blogs:
Strategies for the New Economy: making skills the currency of the labour market, presents ten strategies and twenty-two case studies that illustrate the range of actions that can be taken by educationalists, education technologists, business leaders and government to shift to a fully skills-based labour market.
Towards a Reskilling Revolution: industry-led action for the future of work, extends our previous research to assess the business case for reskilling and establish its magnitude for different stakeholders. It also outlines a roadmap for selected industries to address specific challenges and opportunities related to the transformation of their workforce.
Supply Chain 4.0: global practices and lessons learned for Latin America and the Caribbean, includes the results of a detailed examination carried out in six LAC countries – Argentina, Brazil, Colombia, the Dominican Republic, Mexico and Paraguay – on the state of four supply chains, namely appliances, automotive, food processing and textiles
A rejection of populism: global public opinion comes out strongly in favour of openness and collaboration. However, regional viewpoints differ. Asked how important it is that countries work together towards a common goal, a global average of 76% said they believe it is either extremely important or very important. These sentiments are felt most strongly in South Asia and sub-Saharan Africa, where 88% share the same view. At the other end of the scale, only 61% of Western Europeans and 70% of North Americans say they consider cooperation to be extremely or very important. [Download Globalization 4.0 poll results here (pdf)]
In a 5G World, new global architecture needed to protect core values; 5G and the growing need for national CTOs; Who should pay for workers to be reskilled?; Slowdown – rather than collapse – in global growth anticipated for 2019
World Bank president: list of reforms African states should be demanding (The Conversation)
Despite the fact that the selection process may be rigged, African states should use the opportunity to press for reforms to the Bank’s governance to make it more accountable. The truth is that the Bank’s original governance arrangements have changed much more slowly than the scale and nature of its operations. They are no longer fit for purpose. The selection of a new World Bank President offers African states an opportunity to improve the Bank’s governance arrangements. But how? African states should offer the US and their European allies a deal. They will agree to support the US nominee for President in return for their agreement to implement the following package of reforms: [The author: Danny Bradlow]
Enhancing South Africa’s socio-economic inclusion through increasing equitable access to the country’s tertiary institutions in a weak economic environment will require comprehensively improving the country’s post school education and training system, according to a World Bank report released today. While South Africa’s new education policy aims to equip poor and working-class citizens with the skills needed for today’s job market, the latest economic update for the country shows that its implementation could negatively affect the national budget. Announced in December 2017, the policy offers free tertiary education to 90% of academically eligible students, to meet the national goal of doubling Post School Education and Training (PSET) enrollment by 2030.
This paper argues that adopting a “developmental regionalism” approach to trade integration provides the best prospects for the AfCFTA to catalyse the process of transformative industrial development, cross-border investment and democracy, governance, peace and security in Africa. This paper also discusses the progress being made by African countries and the continent in implementing each of the four pillars of the “developmental regionalism” approach to implementation of AfCFTA) that benefits all African countries and advances the objectives of NEPAD, and Agenda 2063. This paper is organised as follows: Section Two: History of regional integration in Africa: from Pan-Africanism to the AfCFTA; Section Three: Theory and Norms – the case for “developmental regionalism”; Section Four: Four pillars of developmental regionalism: a) Fair trade integration; b) Cooperation on transformative industrialisation; c) Cooperation on cross-border infrastructure investment (and trade facilitation); and d) Cooperation on democracy, good governance and peace and security; Section Five: Conclusion. [The author: Faizel Ishmael]
Related: TIPS Development Dialogue – International Trade and Inclusive Industrialisation (29 January, Pretoria). The speakers: Xolelwa Mlumbi, Neva Makgetla, Faizel Ismail, Christopher Wood.
The economic performance varied significantly across the five sub-regions in 2018 (figure III.9). East Africa continues to be the fastest-growing sub-region in Africa with a 6.2% growth rate driven by government spending on infrastructure and domestic demand. North Africa expanded by 3.7%, with economic activity driven by improvements in tourism revenues and rising agriculture production. West Africa, led by the Nigerian economy, grew by 3.2% due to the increase in oil revenue. Meanwhile, economic growth of the Southern African sub-region deteriorated slightly from 1.5% in 2017 to 1.2% in 2018, and remains adversely affected by the economic performance of South Africa. After two challenging years, Central Africa achieved a 2.2% growth rate in 2018, exiting recession of -0.2% in 2017.
Profiled analysis – Box III.3. pdf African Continental Free Trade Area – opportunities and challenges for achieving sustainable development (1.75 MB) :
The implementation of the AfCFTA has some fiscal policy implications through marginal losses in tariff revenue. The small scale of the losses is mainly due to intra-African trade being a small share of Africa’s total trade (only 18% of total exports in 2016), and most intra-African trade is already liberalized under RECs. The AfCFTA is estimated to affect only about 7% of Africa’s total imports under current trade patterns. Nonetheless, there is widespread fear within participating countries that the revenue losses will prove significantly larger, which could delay implementation of the AfCFTA.
The resulting tariff cuts would lead to a redistribution of income from Governments to consumers and producers. Moreover, the AfCFTA is expected to produce additional welfare gains that surpass tariff losses significantly due to better allocation of resources. Furthermore, countries will be allowed to exclude a certain number of tariff lines (e.g., tariff lines that are important for raising tariff revenues) from the liberalization process. Conveying these messages clearly to participating countries is crucial to accelerating the implementation of AfCFTA.
These tariff revenue losses may also be outweighed by the additional revenues from growth to be generated by the AfCFTA, which would broaden the tax base and boost revenue collection from other sources. Growth in Africa is expected to accelerate by 0.3–0.6 percentage points by 2040 (depending on the liberalization approach or scenario adopted), when compared to the baseline scenario. All African countries would experience an increase in their GDP with the AfCFTA reforms, whatever the scenario. Countries such as Zimbabwe are expected to increase by between 3.6 and 31.9%, depending on the scenario. However, these forecasts are likely to substantially underestimate the economic benefits of the AfCFTA, as they do not take into account the impact of liberalization in other areas such as services and investment.
In sub-Saharan Africa, growth is expected to pick up from 2.9% in 2018 to 3.5% in 2019, and 3.6% in 2020. For both years the projection is 0.3 percentage point lower than last October’s projection, as softening oil prices have caused downward revisions for Angola and Nigeria. The headline numbers for the region mask significant variation in performance, with over one-third of sub-Saharan economies expected to grow above 5% in 2019-20. [Christine Lagarde: remarks at World Economic Outlook press conference]
Global foreign direct investment fell by nearly a fifth in 2018 to an estimated $1.2 trillion from $1.47 trillion in 2017, according to the latest UNCTAD Global Investment Trends Monitor (pdf). The drop, the third in as many years, brings FDI flows back to the low point reached after the global financial crisis, with the decline concentrated in developed countries where inflows fell by as much as 40% to an estimated $451 billion. Of the developing economies, Asia and Africa benefited the most, with flows increasing to developing countries in Asia by 5%. East and South-East Asia, where inflows were up 2% and 11% respectively, took the lion’s share of foreign investment, accounting for one-third of global FDI in 2018 and almost all growth in FDI to developed economies. “South East Asia is the main FDI growth engine,” said Mr. Zhan, with the region rebounding from a dip in 2017, buoyed by growth in Indonesia and Thailand. Greenfield announcements in developing economies rose by 47% reaching an estimated $539 billion and linked to Asian growth prospects. African FDI flows were up 6%, though growth was concentrated only in a few countries such as Egypt and South Africa. “Slow economic recovery in Latin America and the Caribbean saw flows drop by 4%,” Mr. Zhan added.
Next generation UNDP: statement by Achim Steiner (UNDP)
In keeping a firm focus on implementing our Strategic Plan, we will keep three international priorities at the forefront of our thinking and action in 2019: Inequality, climate change, and migration – and its drivers and root causes. In 2019, UNDP will launch a new report on irregular migration, focusing on African migrants who travel to Europe. It offers unique and timely analysis compiling perspectives of 3,027 individuals who have migrated from 43 African countries, and who were interviewed across 40 cities in 13 European destination countries, to which they had primarily arrived by sea. We expect that this report, which follows the 2017 Journeys to Extremism in Africa report, will challenge many commonly held assumptions about migrants and why they move. [Statement to the First Regular Session of the UNDP Executive Board]
The ILO Global Commission on the Future of Work has called on governments to commit to a set of measures in order to address the challenges caused by unprecedented transformational change in the world of work. Co-chaired by South African President Cyril Ramaphosa and Swedish Prime Minister, Stefan Löfven, the commission outlines a vision for a human-centred agenda that is based on investing in people’s capabilities, institutions of work and in decent and sustainable work. Among the ten recommendations are:
A universal labour guarantee that protects fundamental workers’ rights, an adequate living wage, limits on hours of work and safe and healthy workplaces.
Guaranteed social protection from birth to old age that supports people’s needs over the life cycle.
A universal entitlement to lifelong learning that enables people to skill, reskill and upskill.
Managing technological change to boost decent work, including an international governance system for digital labour platforms.
Greater investments in the care, green and rural economies.
A transformative and measurable agenda for gender equality.
Reshaping business incentives to encourage long-term investments.
An executive summary can be accessed here.