Building capacity to help Africa trade better

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Special Economic Zones Make Good Progress in Attracting Investors - Deputy Minister Gina (The dtic)

The Deputy Minister of Trade, Industry and Competition, Ms Nomalungelo Gina says the Special Economic Zones (SEZs) Programme has now entered a full implementation phase with designated SEZs continuing to show a positive progress in terms of the growing number of investors operating in the zones. Gina was addressing the Chief Executive Officers (CEOs) of the country’s SEZs.

“Government is repositioning itself for a long-term industrial and economic development. Among other strategic interventions is the SEZs Programme, which includes specifically targeted economic activities, supported through special arrangements which include laws, regulations, incentives and systems that are different from those that apply in the rest of the country,” said Gina.

South Africa Offers Opportunities for Foreign Investors (InDepthNews)

South Africa is in frantic search of foreign investors to boost its economy exposed to turbulences caused by two years of struggle to contain the global pandemic that triggered almost complete shutdown of businesses and production under lockdowns, which threaten economic efforts since the ambitious investment plan was initiated in 2018 under President Cyril Ramaphosa. To attract foreign investors, South Africa is holding the fourth investment conference (SAIC) on March 24 in Johannesburg. It will draw participants from both the private and public sectors from the United States, Europe, Asia and inside Africa. In addition, international and regional institutions, development partners and think-tanks will come together to deepen dialogue, share experiences, and discuss business opportunities to boost investment and sustainable development in South Africa.

Many multinationals investing in South Africa also use the country as a base to serve their customers in Africa and in particular the southern region. As a relatively stable country with a technologically advanced telecommunications network and a secure banking system, South Africa provides support to these global companies so that they can take advantage of opportunities in the country and the region, adds Ms Williams.

Mining exploration is key to attracting investment (SAnews)

South Africa aims to gain at least 5% of global mining exploration expenditure in the short and medium term. This is according to Mineral Resources and Energy Deputy Minister, Dr Nobuhle Nkabane.

“Continued and enhanced mining exploration should be the cornerstone to the future of the mining industry in South Africa. Working with the industry, we have compiled an Exploration Strategy, which amongst others aims to ensure that we attain at least 5% share of global exploration expenditure within the short to medium term. “In the main, the strategy identifies barriers that inhibit exploration investment in South Africa that is commensurate with its geological endowments and proposes a coordinated approach amongst key stakeholders in resolving the existing challenges in the shortest possible time,” Nkabane said.

Cabinet approves major infrastructure plan for implementation (SAnews)

Cabinet has approved the implementation of the National Infrastructure Plan (NIP) 2050. The plan is set to provide catalytic projects that are meant to contribute towards the country’s long-term economic and social developmental goals. Speaking on behalf of Cabinet, Minister in the Presidency, Mondli Gungubele, said the plan received a number of written comments after it was published for public comment in August 2021. Inputs were also received from public consultations with various stakeholders in the infrastructure sector. “The consultation included regional and continental bodies, such as the Southern African Development Community and African Union Commission for Infrastructure. “The NIP provides for the development of the country’s infrastructure networks that are aligned to the National Spatial Development Framework and the District Development Model (DDM),” Gungubele said on Thursday.

Chinese Imports Edging Out Kenya’s Local Products (VOA)

Kenyan artisans say they are losing the market for their products to Chinese imports. According to the crafts persons, the high quality and lower prices of Chinese-made goods put them at a disadvantage.

National data show that Kenya spent nearly $4 billion on imports from China in 2021. Kenya sources a vast array of consumer and capital products from China, while exporting $1.5 billion worth of goods to the Asian market. Traders like Magdalen Vivi, who sells imported kitchenware, say customers demand modernized products like nonstick cooking pots, commonly known as sufuria in Swahili.

An African Union study on international trade finds that the African continent is the largest market for Chinese goods. Some Kenyan consumers prefer the wide variety of the cheap products. Mary Wambui is one such buyer.

“There is always variety,” Wambui said. “All the time, you get new products, and they have different types. You don’t get the same ones all the time. Every time you come, there is something new that has come up.”

Local raw material sourcing spares EABL from Russia shocks (Business Daily)

The strategic shift to local sourcing of raw materials has spared East African Breweries Plc (EABL) #ticker:EABL from supply chain disruptions following Russia’s invasion of Ukraine. The geopolitical event has led to soaring commodity prices including those of wheat and barley which are key brewing ingredients for the alcoholic beverages produced by EABL. “A few years ago we declared an intent to have 80 percent of all our input sourced locally and that kind of shields us from the heavy shocks from global impacts such as what is going on in Ukraine,” said EABL chief executive Jane Karuku. Russia and Ukraine, for instance, account for about 30 percent of the world’s barley supply and the conflict has caused a major disruption in supply of the commodity. Ukraine recently banned the export of barley, among other commodities as it hunkers down in the face of the conflict. Imports from Russia on the other hand have been made difficult because of sanctions imposed by other world powers on Moscow including its ban from SWIFT which is the platform most commonly used by banks to verify international financial transactions.

Report on mobile cash laundering risks to be released April (Business Daily)

An anti-money laundering report that will form the basis of expanding the current Sh300,000 daily cap on mobile money is ready and will be released next month. The Financial Reporting Centre says the findings of the assessment, which started in March 2019 to identify threats to the integrity of Kenya’s financial system are now ready to be made public. FRC has been coordinating a team tasked with setting standards and promoting the development of legal, regulatory and operational measures to combat money laundering and terrorist financing. “We have covered (the risks posed by mobile-money network) under the national risk assessment report and we are planning to release it next month,” FRC director-general Saitoti Ole Maika said via telephone. “The report will have all the indicators of the risks per product and per sector.”

Kenya is now the cheapest country to purchase diesel in Eastern Africa (Business Daily)

Diesel prices in Kenya are the lowest in eastern Africa in the wake of the monthly subsidy, reversing the market structure that made the country’s fuel the most costly in the region. A litre of the commodity costs Sh112.63 on average in Kenya, compared to Sh118.44, Sh139.08 and Sh149.91 in three of the six East African Community countries, Tanzania, Uganda and Burundi, respectively. This bucks a trend where Kenya has had the costliest super petrol and diesel in the region mainly due to relatively high taxes and levies, which encourage local motorists in border towns to fuel in the neighbouring countries. The shift in the market structure is linked to the introduction of monthly subsidies in Kenya, which cut the current diesel prices by Sh23.29 a litre.

“The big difference is mainly attributed to the subsidy that the government has been using,” said an official at the Energy and Petroleum Regulatory Authority (Epra).

Safaricom’s M-Pesa crosses 30 million active users in Kenya (The East African)

Mobile money transfer platform M-Pesa has crossed 30 million users in Kenya as traders accepting payments through Lipa na M-Pesa doubled, cementing Safaricom’s dominance in digital transactions in the country. The giant telco’s chief executive Peter Ndegwa announced Thursday that Kenya accounted for more than 30 million of the platform’s 51 million customers across the region.

Mr Ndegwa also said businesses operating Lipa na M-Pesa Till numbers have doubled from 173,000 in April 2020 to more than 387,000. “The growth in M-Pesa customer usage has been driven by the launch of various innovations over the years including financial services such as M-Shwari, KCB M-Pesa and Fuliza,” Mr Ndegwa said. The Central Bank of Kenya (CBK) plans to launch a national payment system that will force Safaricom to accept cash from rival firms such as Airtel on its Lipa na M-Pesa platform, enabling a seamless transfer of money through merchants. The new system, to be introduced by 2024, will remove the hurdle where Airtel subscribers, for example, cannot pay for goods and services through Safaricom’s till and pay-bill numbers.

Rwanda has reopened the border with Uganda but distrust could close it again (The Conversation)

Rwanda has now fully reopened the Gatuna border with Uganda, ending a three-year impasse on the Northern Corridor, one of East Africa’s key transport arteries that funnels goods from the Indian Ocean seaport of Mombasa to Uganda, Rwanda, Burundi and Democratic Republic of Congo. Rwanda abruptly closed the border in February 2019 after it accused Uganda of abducting its citizens and supporting rebels seeking to topple President Paul Kagame.

Gatuna is one of the most important borders in East Africa as it connects Kenya’s Mombasa port to various cities in the region. On average, 2,518 trucks pass through the Gatuna border every month (84 trucks per day) into Uganda, Rwanda, Burundi and eastern Democratic Republic of Congo. The East African Community has since upgraded it into a one-stop border post. Its closure had choked off commerce in East Africa. Its re-opening is set to spark social and economic activities and also benefit the informal cross-border traders.

GSS to quantify illicit financial flows lost to Ghana (Ghanaian Times)

The Ghana Statistical Service (GSS) has initiated a process to measure how much the country lost through Illicit Financial Flows (IFFs) in the export and import trade sector over the last 21 years (2000 -2021). IFFs involve illegal movements of money or capital from one country to another that are illegally earned, transferred, and/or utilised to, among other things, evade tax. With support from the Ministry of Finance and the Ghana Revenue Authority (GRA), the exercise would estimate the losses and the loopholes to enable the country to take specific action to block them.

Ghana has recorded balance of trade surplus despite Covid-19 challenges - Alan Kyerematen (Myjoyonline)

The Minister of Trade and Industry, Alan Kyerematen, has lauded Ghana’s participation in the ongoing Dubai Expo 2020 which has brought governments, experts as well as global business leaders under one roof to discuss matters of global economic interests.Addressing participants at the Business Forum in Dubai, the Trade Minister said such events are important as Ghana and the United Arab Emirates (UAE) seek to advance cooperation in strategic investments needed to harness the country’s vast resources for industrial transformation and to boost trade and investment among the two countries.

Agriculture Remains Backbone Of Nigeria’s Economy - CBN (The Tide)

The Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, says agriculture remains a strong pillar and saving grace for the Nigerian economy.

The CBN Governor expressed satisfaction with the level of interest shown in agriculture and the tremendous impact the sector had had in the last six years. He wondered how the country could have coped with the rising prices of food and commodity items across the world without the foresight to revamp agriculture. Emefiele said the Central Bank had assumed a pivotal role in agriculture since 2015, when President Muhammadu Buhari directed that “we produce what we eat and eat what we produce”.

AfCFTA: Nigeria’s strategic objective is to capture 10% of Africa’s import by 2035 – Achimugu (Nairametrics)

The Nigerian National Action Committee on the African Continental Free Trade Area, AfCFTA, has revealed that its strategic objective is to capture 10% of Africa’s imports by 2035, thereby doubling Nigeria’s export in the process. This was disclosed by Franca Achimugu, Coordinator Oil and Gas Workstream, Secretariat of the National Action Committee on the AfCFTA at the Implementation Plan Adoption meeting with the Oil and Gas Workstream which was held at the Nigeria National Petroleum Corporation Headquarters, Abuja, Nigeria on Thursday. She added that Nigeria’s mission is to become the preferred provider of value-added services to Africa.

Introducing the agreement and what the Oil and Gas sector stands to benefit from its full implementation, she said, “AfCFTA means Nigeria is no longer Africa’s largest economy, we need to sit up and get our house in order.” She added that Nigeria is aligning itself for agreements, which comes

SON sensitizes Kano rice millers on 3rd party milling requirement (Solacebase Online)

The Standards Organisation of Nigeria (SON) has sensitised rice millers in Kano State on its requirements for third party milling. The Director-General of SON, Malam Faruk Salim, said on Thursday in Kano that the aim was to empower the millers to make their products to be of standard. Salim expressed the readiness of the organisation to help factories to ensure they don’t loose their products by using false machine and also to protect customers.

“If you standardise a product, it will be available for local consumption and export with the Free Africa Trade, with what we have right now, it makes products easy to move across the border,” he said. The director-general further explained that if a product was up to standard and producers follow the laid down rules, they would not have any problem in their receiving country.

Afreximbank congratulates the Republic of Congo as it adopts Factoring Law (Afreximbank)

African Export-Import Bank (Afreximbank) announced that the Republic of Congo has enacted a factoring law to support business activities. The Bank congratulated the Republic of Congo saying that the move constitutes a critical milestone in its efforts to increase Africa’s share of global factoring volumes from its current level of around 1%. Factoring offers an alternative trade finance instrument to African firms especially SMEs, and therefore this enabling law will provide a major boost to the development and growth of SMEs in the Republic of Congo. By creating a legal infrastructure which supports diversification of SME financing, and provides credibility and assurance to investors, the law significantly facilitates access to finance for previously excluded small and medium sized businesses in the Republic of Congo. Moreover, the Republic of Congo’s initiative will serve as a model to Central African States in particular, and other African States who are yet to enact a law on factoring, by demonstrating the benefits of such legal reforms.

Group Harps On Necessity To Dev SMEs (The Tide)

President, Community of Reformed Youths Initiative (CRYI), River State, Engr. Gogo Wenike-Briggs has said that there is an urgent need to develop the Small and Medium Enterprises (SMEs) in the Niger Delta region. Engr. Wenike-Briggs who made this known in a release to newsmen in Port Harcourt recently, said most business sectors in Rivers State are dominated by micro and small enterprises, producing for the domestic market.

The CRYI President, however, expressed worry that they do not grow into middle-sized and ultimately large manufacturing firms, stressing that “small firms (employing between 1-9 people) are the seedbed of the manufacturing sector and have contributed successfully to the growth of the industrial sector in most western countries like East Asia, Europe and US”. He continued that “there is the need to construct a more modern mall with international branding, integrating shopping outlets for various items, and linked to transport and social facilities.

“Establish market and technological linkages to effectively link the small manufacturing enterprises to the export market to drive their growth via outsourcing.

African trade

DG Okonjo-Iweala welcomes project in support of African Continental Free Trade Area (WTO)

The project will support the implementation of more than 30 activities in the AfCFTA strategies of Burkina Faso, Côte d’Ivoire, Guinea, Mauritania, Niger, Senegal, Togo and Tunisia. By assisting the implementation of priority actions formulated by UNECA, the project will help to create an environment where trade can be more efficient and inclusive in the eight beneficiary countries. “This programme illustrates the spirit of partnership needed to support the implementation of the AfCFTA,” said Dr Ngozi Okonjo-Iweala in her opening remarks.

Landlocked Africa seeks competitive rates and sustained air cargo capacity (The Loadstar)

An increasingly competitive landscape and high airfreight costs have put pressure on air cargo in some landlocked parts of Africa. Most African shipments are perishables, but for mining economies such as Zambia, which is landlocked in southern Africa, mining-related materials, as a percentage of total imports, have declined in recent years. Generally, there has been a steady decline of imports and exports since 2018 in the country. Imports to year-end 2021 were down 25%, and exports down 15% over the same period, according to data from NAC2000 Corporation, the only ISAGO registered and certified airport ground services provider in Zambia. “We observed that due to absence of capacity and prohibitive airfreight cost we have seen mining equipment being progressively sourced and stored via sea and road through depots in South Africa, and trucked within the region, with most non-urgent mining cargo sent by sea and road, much less by airfreight,” said Jonathan Lewis, managing director at NAC2000.

African fintech growth, investment matched by increasing IP complexity, regulation (Engineering News)

Financial technology (fintech) in Africa has experienced significant investments into the sector and growth of the sector over the past few years, which is expected to continue. Regulation of and legislation governing the sector is also increasing apace and investors and fintech must monitor and manage intellectual property (IP) to protect and ensure that companies within it can trade and grow.

There were more than 800 deals in the fintech and startup sector in Africa, which raised more than $4.3-billion, in 2021. This was more than double the value of deals in 2020, which had seen similarly large growth in deals when compared with 2019, said global mobile telecommunications industry association GSMA mobile for development head Max Cuvellier.

“It is not just the private sector that is moving into fintech – so are the regulators,” said CDH director and private equity sector practice co-head John Gillmer.

Africa can lead the world by putting nature at the heart of finance (UNECA)

“We are all asset managers,” writes Professor Partha Dasgupta in his seminal study on the economics of biodiversity. “Whether as farmers or fishers, foresters or miners, households or companies, governments or communities,” we all influence the store of value held in our most precious asset—the natural world around us.

And while, rightly, our attention is focused on our warming planet, we must recognise that the climate crisis and nature-loss are inextricably linked. All paths to net zero require the large-scale removal of carbon from the atmosphere and the only affordable and immediately available methods of doing this are in nature. Nowhere is this interdependency more clear than in Africa which is among the regions of the world most vulnerable to climate change and most dependent on nature. With almost a quarter of its GDP dependent on nature, every development pathway for the continent relies on its responsible management.

Africa’s reliance on nature is a source of vulnerability, but potentially also of competitive advantage.

African Development Bank Group approves a borrowing policy to strengthen debt sustainability in low-income countries (AfDB)

The Board of Directors of the African Development Bank Group has approved a new policy that aims to strengthen debt sustainability among low-income African countries. The Board approved the Sustainable Borrowing Policy on 23 February 2022. The new policy primarily targets recipients of the African Development Fund, the concessional window of the Bank Group. The Fund caters to low-income and transitional countries on the continent. The Sustainable Borrowing Policy responds to a changing debt landscape in Africa, especially among the abovementioned countries. In recent years, low-income countries have gained access to new sources of finance, including private creditors and creditors outside the Paris Club. Although this access has allowed them to finance important development needs, it has also increased their public debt.

Africa must learn to compete with dominant Chinese firms (African Business)

In 2018 the German Network for Architecture Exchange and the country’s Ministry of Foreign Affairs brought together policy and construction industry representatives at an event focused on Germany’s relationship with Africa. Part of the conversation was on resolving the question of China’s growing dominance in the African construction market.

Many European firms have lost bids to Chinese contractors, with Chinese bid submissions sometimes 20% below European ones. According to the European International Contractors, China took 62% of the African construction market in 2018. This is an incredible reversal of positions, since according to The Economist, in 1990, American and European companies scooped up more than 85% of construction contracts on the continent. This changing of the construction guard is illustrative of an important, but overlooked, aspect of the Africa-China relationship – the dominance of Chinese, and not African, firms in the continent’s construction sector. While the arrival of the Chinese has increased competition and driven down the cost of infrastructure, it has also entrenched the trend of external actors dominating an important sector. If China is serious about a qualitatively better relationship with Africa, this will have to change. China is keen to tout its “all-weather” friendship with Africa, as was stressed by foreign minister Wang Yi, in a 2020 CGTN interview noting that “China and Africa have always shared weal and woe.” But a shift from European to Chinese firms at the expense of the growth of African ones retains the character of an unequal relationship.

The onus, however, is on African nations. They would do well to learn from how China tackled this problem (growing local firm capacity) during its development phase. Knowledge transfer and building local capacity was a direct function of state policymaking.

IMF chief says Africa is “particularly vulnerable to impacts from the Ukraine war” (CNN)

International Monetary Fund Managing Director Kristalina Georgieva said the war in Ukraine comes “at a delicate time for Africa,” which is particularly vulnerable to economic aftershocks.

“Africa is particularly vulnerable to impacts from the Ukraine war through four main channels—increased food prices, higher fuel prices, lower tourism revenues, and potentially more difficulty accessing international capital markets,” Georgieva said in a statement published on Thursday.

“Redoubling efforts to advance reforms that further promote resilience is a priority for many countries. At this difficult moment, the Fund stands ready to help African countries address the repercussions of the war, and to help design and implement reforms through our policy advice, capacity development, and lending. Recent reforms to the Fund’s lending toolkit provide greater flexibility to help meet financing needs,” she said.

Global economy news

New UNCTAD publications:

Key statistics and trends in international trade 2021: The effects of the COVID-19 pandemic on international trade

Key statistics and trends in trade policy 2021: The Regional Comprehensive Economic Partnership Tariff Concessions

DDG González: Trade cooperation essential for fairer, greener and resilient economies (WTO)

During the podcast, DDG González emphasized the need to accelerate the implementation of trade-facilitating measures to help ease the continued disruptions plaguing global supply chains and to expand the participation of small businesses in international trade. While some of the drivers of current supply chain bottlenecks may be temporary, others, especially the surge in electronic commerce, may prove permanent, highlighting the need to strengthen the resilience of supply chains going forward, she said.

On the impact of trade measures during the pandemic, DDG González noted that the overall picture is better than many people feared when the pandemic first struck. She said that several governments temporarily eliminated tariffs, eased or digitized customs procedures, introduced green lanes for medical products and their inputs, or streamlined regulatory approval requirements, helping to keep markets broadly open and supply chains for essential goods moving. Nonetheless, there is significant room for more trade cooperation to help achieve global vaccine equity, which is still a long way off, she said.

EU farmers boss: War might hit our food supplies, but will hit Africa, Middle East harder (EURACTIV)

The EU is unlikely to go hungry as a consequence of the war in Ukraine, but it could have a devastating impact on areas of Africa and the Middle East, according to farming boss Pekka Pesonen, who called for an ‘enhanced’ Green Deal package to maintain both quality and quantity in the European food supply.

Pekka Pesonen is the general secretary of the EU farmers’ association, COPA-COGECA. He spoke with EURACTIV’s agrifood team about the fallout of the war in Ukraine and how the EU’s green goals should be expanded in light of the situation.

The situation is not yet fully analysed, and we haven’t seen the full impact of it yet. But I think it’s quite safe to say already at this stage, that we would expect that we would have major disruption of international trade patterns, and especially in agricultural commodities that such as maize, sunflower, oil, and we expect trade disruptions not only between us [Russia, Ukraine, and Belarus and the EU] but also third countries.

We need to put our trade relations with other partners in the global trade framework to the test. The fundamental element is that we have to find a new international trade structure in the coming weeks to supply the market with sufficient quantities, or volumes to supply certain key markets so that they won’t see any major price increases that would be politically sensitive. I think there’s a common understanding across the big players that we need to act upon this.

Russia Turns to Africa for Trade Amid US, EU Sanctions (Business Post Nigeria)

As the United States and the European Union (EU) tighten their sanctions on Russia due to special military operation, demilitarization and denazification in Ukraine, Russians are now looking to diversify both exports and imports in Africa’s direction.

Russia and Ukraine share a common border, both are former Soviet republics struggling to move onto the global stage. Russia was angered because of Ukraine’s ambition to join the North Atlantic Treaty Organization (NATO) and the EU. With the conflict that began February 24, and amid Western and European sanctions, Russia plans to expand its network of trade missions in Africa, according to Vladimir Padalko, Vice President of the Russian Chamber of Commerce and Industry.

According to official reports, the popular Russian perception is that Africa is a promising market for Russia and information data obtained from the Industry and Trade Ministry, Russia has only four trade missions in Africa – in Morocco, Algeria, Egypt and South Africa. In addition, several interviews and research indicated that the Russian expert community advocates for strengthening business relations with Africa, and for example see fruits, tea, coffee from the EU countries can be replaced with products from African countries.

The least developed countries need to strengthen and broaden State capacity to operationalize policy space and achieve development goals (UNCTAD)

State capacity both drives improved development outcomes and is accumulated as a by-product of positive progression in the development process. However, the least developed countries have experienced attrition on both fronts. Development challenges among the least developed countries in the 2020s require them to develop and strengthen State capacity. These countries need the support of development partners through the implementation of programmes that intentionally reinforce and expand State capacity.

Mainstreaming Gender in National Policies: The cases of Ethiopia, Indonesia and Sri Lanka (UNCTAD)

Globalization and the growth of international trade have offered important pathways for speeding up the industrialization process. Access to larger markets enables both economies of scale and scope, capturing gains beyond what domestic consumer incomes can support. Similarly, access to global technologies, foreign exchange, and global value chains further facilitates these processes. These mechanisms underlie the promise and prominence of export-led industrialization, and the trade in manufactures that drives it, as a development strategy. Partly because of the connection between exporting manufactures and women’s employment, particularly in the more labor-intensive early stages of export-led industrialization, gender offers a useful lens into the social inclusion of structural transformation. In this background paper, we present an analysis of the connections between gender, employment and structural transformation since the early 1990s, including a general overview of trends and then focusing on specific country studies for Ethiopia, Indonesia and Sri Lanka. Given its recent development success, particular references to China’s experience will be made throughout

Tackling illicit trade through stricter anti-money-laundering rules (EURACTIV)

As illicit trade is rising, governments and affected industries are looking to combat the trend. One possible way is to pursue money laundering crimes more strictly so that criminals have fewer options to use the proceeds from their activities.

A recent report by the OECD estimates that up to 5.8% of EU imports are counterfeits. Moreover, the recent disruptions of supply chains and global shipping and the rise of e-commerce have provided traders of illicit goods with new opportunities to exploit. “The economic impact is really, really huge,” OECD economist Morgane Gaudiau told a recent online panel organised by EURACTIV and sponsored by Japan Tobacco International (JTI).

The panel discussed both the impact illicit trade could have on the economy and what could be done about it.


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