Zimbabwe Infrastructure Report 2019 (AfDB)

Zimbabwe has faced headwinds over the last decade resulting in a collapse of the economy. However, following the political transition of November 2017, the new government requested the African Development Bank to update the 2011 Zimbabwe Infrastructure Flagship Report, so as to aid in investment planning as part of the vision 2030. The government also requested the Bank to prepare an urgent economic report, to assist and advice on re-engagement with the international community. All these requests were to aid in the Joint Needs Assessment that was to be coordinated by the Bank, the United Nations and the World Bank. The Bank accepted these requests, cognizant of the fact that policy actions and, in particular, investment in infrastructure have important roles to play in the development of continental trade and in promoting economic linkages within Africa.

This report serves four purposes by providing: (a) the Government with a master plan for rehabilitation of infrastructure assets and recovery in infrastructure services in Zimbabwe within the context of vision 2030; (b) a game plan for re-engagement with the international community in the field of infrastructure in the event that the Government moves ahead with arrears clearance in 2019; (c) a platform from which a strategy for possible AfDB and other donor operations in Zimbabwe can be drawn up; and (d) as part of the Joint Needs Assessment including costing of the infrastructure sectors. The focus of this Report is on the services associated with transport, electric power, information and communication technologies (ICT), and water and sanitation in Zimbabwe. The Report provides a detailed assessment of the current status of the infrastructure and services in these four sectors in the country and their role within the Southern Africa region. [Download: pdf Zimbabwe Infrastructure Report 2019 (5.90 MB) ].

India protests against US-EU move at WTO (LiveMint)

India, South Africa and China are among those that have pushed back against a joint US-EU proposal to call out and punish countries that have not followed notification requirements under various WTO agreements. The countries feel it is unfair to impose harsh requirements on developing countries facing deep capacity constraints, and are reminiscent of colonial era rules. As part of proposed reforms to the global trade body, the US and EU, along with Japan, Canada, Australia, Costa Rica, Argentina and Taiwan, on 11 April, sought to impose stringent notification requirements, including financial penalties, on countries for failure to comply. At the meeting of WTO’s Council on Trade in Goods, the US justified the proposal on grounds of “chronic low level compliance with existing notification requirements under many WTO agreements (by members)”. It seeks to allow “a counter-notification of another member concerning notification obligations”.

Japan, US investors get in on the African start-up scene (The Africa Report)

Start-ups in Africa enjoyed buoyant growth in 2018. According to a study conducted by the US-based venture capital firm Partech Ventures published at the end of March, start-ups across the continent attracted a total of $1.16bn in investments in 2018, double the amount raised in 2017. Silicon Savannah, Kenya’s $1bn technology hub, leads the Partech study’s country rankings, having raised $348m in 44 funding rounds in 2018 – nearly $100m more than that of South Africa. Nigeria ranks second in terms of fundraising by country, with $306m raised in 2018, buoyed by a dynamic entrepreneurial spirit prevailing across Lagos, where entrepreneurs must nevertheless overcome enormous challenges in order to jump start their business.

Judd Devermont: Haven’t we done this before? Lessons from and recommendations for strategic competition in Sub-Saharan Africa (Lawfareblog)

If the US government aims to strengthen its position vis-a-vis Beijing, it needs to harness its private sector, stand up for US values, and institute more robust education and cultural exchange programs with African nations. Moreover, the US needs to do more to court African leaders—of whom only Nigerian President Muhammadu Buhari and Kenyan President Uhuru Kenyatta have visited the White House. The ambassadors in the mid-1960s made the same point. They argued that personal relationships between chiefs of state are important in Africa: “[F]or US policy objectives to be advanced, it is desirable that African leaders be made aware of the US President’s personal interest in African affairs.”

Instead of simply positioning the United States as a competitor, there are opportunities to step in and act as a referee to protect US interests and forestall further negative developments. This is what former Assistant Secretary of State for African Affairs Chester Crocker did in southern Africa, negotiating the Cuban withdrawal from Angola in the 1980s. It allowed the United States to stay above the fray, while ensuring U.S. equities were advanced. In cases where there isn’t a US company in the mix for a business opportunity, the United States could offer its good offices to assist with environment and labor assessments, and support negotiations to ensure African governments obtain the best economic package from China or other foreign actors.

WBG/IMF Spring Meetings: a final set of updates

1. Sub-Saharan Africa Regional Economic Outlook: IMF lays out policies for economic recovery amid elevated uncertainty Some 21 countries, mainly the region’s more diversified economies, are expected to grow at more than 5 percent and see income per capita rise faster than the rest of the world on average over the medium term. However, the remaining countries, comprising mostly resource intensive countries, including the largest (Nigeria and South Africa), are expected to see slower improvements in standards of living.

   Overall, sub-Saharan African countries need to strike a delicate policy balance between containing public debt levels, investing in human and physical capital, and raising revenue. This calls for urgent action on the fiscal front to improve tax revenue collection, public financial management, and spending efficiency, and on the trade front to reduce non-tariff barriers and deepen intra-trade integration (including in the context of the African Continental Free Trade Area – AfCFTA). Reforms are also needed to facilitate greater private investment, raise productivity, including by promoting diversification and export competitiveness, and strengthen resilience to climatic shocks.

2. African Consultative Group Meeting: statement by the Chairman of the African Caucus and the MD of the IMF. Minister Kenneth Ofori-Atta, Chairman of the African Caucus, and Ms Christine Lagarde, Managing Director of the IMF, co-chaired the African Consultative Group meeting at the IMF Headquarters. They issued the following statement after the conclusion of the Group’s meeting:

   “We had very productive discussions on Africa’s economic developments and prospects. The economic recovery in Africa is expected to continue. However, under current policies and amid increased global uncertainty, medium-term growth for the region is expected to continue to fall well short of what is needed to absorb new entrants to the labor force. The key challenge that Africa faces is to invest in human and physical capital to create jobs while at the same time reducing debt vulnerabilities.

   “Against this backdrop, we agree that countries need to generate fiscal space, enhance resilience including to climate change, and create sustained high and inclusive growth, including by removing obstacles to greater gender equity. This will require, in particular: (i) pursuing growth-friendly fiscal consolidations, where needed, that strike the right balance between development spending, reducing debt vulnerabilities, and meeting essential social needs; (ii) strengthening the effectiveness of monetary policy to enhance the monetary transmission mechanism; (iii) enhancing the flexibility of markets to facilitate adjustment to shocks and preserve competitiveness; (iv) removing trade barriers to boost medium-term growth, including in the context of the African Continental Free Trade Agreement; and (v) addressing illicit financing flows and base erosion to enhance governance and strengthen revenue collection.”

3. Abebe Aemro Selassie: IMF’s African Department press briefing. One development that we are very hopeful will facilitate growth, is increased trade integration in the region. We are very encouraged by the progress that has been made towards the African Continental Free Trade Area. Once completed the trade agreement will establish a market of 1.2 billion people, with a combined GDP of $2.5 trillion. The benefits could be substantial, particularly if countries tackle the non-tariff bottlenecks to trade, including by investing in infrastructure, lowering logistical costs and improving trade facilitation.

   What is interesting, we think, is that intraregional exports in Africa are more diversified and have a higher technology content, than Africa’s exports to much the rest of the world. And just to give you a couple of numbers on this, 40% of intraregional trade is accounted for by manufactured goods, whereas the region exports to the world 75% of such exports tend to be minerals, the likes of crude oil, and other commodities. Still, one thing to note of course, is that, to ensure the benefits of intraregional integration are shared by all, policymakers should be mindful of the adjustment costs that integration could entail and move swiftly to address those.

4. Development Committee: communiqué. We welcome the Mainstreaming the Approach to Disruptive and Transformative Technologies at the World Bank Group paper and the WBG’s efforts to make these technologies affordable and accessible for developing countries. We encourage the WBG to create opportunities for the poor and mitigate risks associated with technology. We ask the Bank Group to continue to work with countries as well as private and public sector partners to mainstream this agenda across sectors. We particularly welcome its work on competitiveness, innovation and consumer protection by supporting agile regulations. We also call on the WBG and IMF to continue work on fintech issues, building on the momentum generated by the Bali Fintech Agenda.

5. International Monetary and Financial Committee: communiqué. Free, fair, and mutually beneficial goods and services trade and investment are key engines for growth and job creation. To this end, we recognize the need to resolve trade tensions and support the necessary reform of the World Trade Organization to improve its functioning. We will expedite work for a globally fair and modern international tax system and address harmful tax competition, artificial profit shifting and other tax challenges, such as those related to digitalization. We look forward to results as soon as possible. We will tackle sources and channels of money laundering and terrorism financing, proliferation financing, and other illicit finance. We will also address correspondent banking relationship withdrawal and its adverse consequences. We are working together to enhance debt transparency and sustainable financing practices by both debtors and creditors, public and private; and strengthen creditor coordination in debt restructuring situations, drawing on existing fora. [Note: the IMFC is chaired by Lesetja Kganyago, Governor of the SA Reserve Bank; IMFC press conference: transcript]

6. Tenth IMF Fiscal Forum: remarks by IMF First Deputy Managing Director David Lipton. Enhancing the efficiency of spending is crucial to reaching the SDGs. We estimate that countries can save about as much through more efficient spending on education, health care, and infrastructure as they can through tax reform. IMF analysis indicates that, on average, countries lose about 30% of potential returns on their infrastructure investments due to inefficient public investment management. Countries could reduce this loss by about two-thirds with targeted reforms and more effective spending. As many of you know, the IMF has developed the Public Investment Management Assessment framework to help with this task. This tool seeks to assess and improve governance over the full infrastructure investment cycle. This work also contributes to the G20 quality infrastructure investment agenda, which is a cornerstone of Japan’s G20 Presidency.

7. Geneva Principles for a Global Green New Deal: top economists outline plan for a global green new deal. The principles are outlined in a new report by UNCTAD’s Richard Kozul-Wright and the University of Boston’s Kevin Gallagher. In A New Multilateralism for Shared Prosperity: Geneva Principles for a Green New Deal, they spell out five key steps that need to be taken to solve the system of “predatory rent-seeking” or “crocodile capitalism” they believe has broken the social contract established in the wake of World War II, allowing global corporations to benefit while the general public loses. In this context transnational corporations’ net income has climbed while global labour income has seen corresponding negative growth. After convening several meetings between policymakers, experts and civil society organizations from across the globe, the economists have advanced a set of ‘Geneva Principles for a Global Green New Deal’. The goal is to lay the foundations for a new multilateralism that rebuilds the rules of the global economy towards goals of coordinated stability, shared prosperity and environmental sustainability, while respecting national policy sovereignty. 5 goals for rebalancing development:

8. G24 press conference: transcript. G24’s Spring Meetings preparatory meeting, held in Lima (March 2019): various downloads on a wide range of topics. Two recent G24 working papers: Quantifying the policy space for regulating capital flows in trade and investment treaties (by Kevin P. Gallagher, Sarah Sklar, Rachel Thrasher); Challenges of investment treaties on policy: areas of concern to developing countries (by Kinda Mohamadieh)

9. Devex: From critic to cheerleader — David Malpass’ first week at the World Bank

10. Kevin Watkins: Will David Malpass trump the World Bank?