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A Roadmap for the New Power Generation
The Future of Electricity 2016 report from the World Economic Forum analyses best practices in improving the investment attractiveness across developing countries and outlines eight key recommendations for policy-makers, regulators, businesses and investors.
Industry estimates show that non-OECD countries will have to double their investments in electricity by 2040 to keep pace with demand. A new report from the World Economic Forum, released on 19 January 2016, offers solutions to improve investment attractiveness of the power sector that would help to bridge this critical investment gap, as the countries face increased competition for capital necessary to invest in power infrastructure.
According to the International Energy Agency (IEA), meeting the electricity demands of consumers and businesses in non-OECD Countries will require $13 trillion investments by 2040 – outspending OECD markets by a factor of 2 to 1. The report outlines recommendations for fast-growing economies to attract more private investments to the power sector in order to achieve their social and economic objectives, including universal access to reliable, affordable power and environment sustainability.
“From 2000-2014, non-OECD countries invested on a par with OECD countries – about $240 billion annually. But given the amount of electricity infrastructure that needs to be built in fast-growing countries to serve growing demand, fast-growing countries will not only have to double their investments but also ensure that these funds are used to develop all parts of the value chain so that none is left stranded or underdeveloped,” said Roberto Bocca, Head of the Energy Industries of the World Economic Forum.
The report analyses best practices in improving investment attractiveness of the power sector and outlines eight recommendations for fast-growing countries:
Policy-makers
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Pursue the most efficient pathways to policy objectives. Develop long-term roadmaps to ensure the right balance between renewable and conventional, centralized and distributed power generation, while remaining as technology-neutral as possible.
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Develop integrated policies that ensure balanced development of the power value chain. Policies need to be integrated across the power value chain to ensure that the upstream fuel supply, generation assets and transmission and distribution (T&D) develop in parallel.
- Ride the declining technology cost curve. Capitalize on the declining technology cost curve and avoid the urge to promote unique technologies that will likely remain at high cost due to a lack of scale.
Regulators
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Provide a level playing field for technologies, reflecting carbon abatement and security of supply appropriately. Structure power markets in ways that recognize the full value and costs of technologies, including carbon pricing.
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Ensure technically and financially viable operations across the value chain by keeping it clear of financial obstacles. Regulators need to work with suppliers to reduce losses from non-metered supply and ensure that tariff subsidies are fully funded.
Business & Investors
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Create effective public-private partnerships to attract private sector capital. Regulations around public-private partners should be transparent and independent to ease investors’ concerns about committing long-term capital.
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Nurture favourable investment environment. Put measures in place to reduce risk and decrease the cost of capital, allocating residual risks to the most appropriate market participants.
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Actively invest in education and R&D to close knowledge and human capital gaps. Foster the development of universities and research institutes that produce the talent that will innovate, develop and manage the power sector in the decades ahead.
“There is a massive need for power in the developing markets, and over 1 billion people still lack access to electricity,” said Steve Bolze, President and Chief Executive of GE Power, and current chairman of the World Economic Forum’s Energy Technology community. “This need will require a portfolio of power generation and digital solutions that will enable affordable, reliable and sustainable electricity.”
“Fast-growing economies have a great opportunity to define the sustainable energy mix and power market structure they need,” said Ignacio S. Galán, Chairman and Chief Executive of Iberdrola and current chairman of the Forum’s Energy Utilities community. “This will play an essential part in driving the required scale of investment to clean energy generation, especially renewable, as well as efficient storage and networks, which is essential in the global energy sector.”
“Within the next 25 years we expect the world’s emerging markets to deploy more renewable-generating capacity than their developed counterparts,” said Julian Critchlow, who leads the Utilities and Alternative Energy Sector at Bain & Company, which collaborated with the Forum on the report. “Historically, the public sector has supplied about 70% of electricity investment in non-OECD countries, but the game has changed. These governments could fall well short of supplying the necessary funds to meet growing energy demands.”
The Future of Electricity report is a continuation of the World Economic Forum’s Future of Electricity initiative, which was launched at the Annual Meeting 2014. Its aim is to provide governments, companies and communities with a platform for dialogue and learning amid the transition to a lower-carbon economy.
Download the report (PDF).
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62 people own the same as half the world, reveals Oxfam Davos report
The Oxfam report An Economy for the 1%, shows that the wealth of the poorest half of the world’s population has fallen by a trillion dollars since 2010, a drop of 41 percent. This has occurred despite the global population increasing by around 400 million people during that period.
Meanwhile, the wealth of the richest 62 has increased by more than half a trillion dollars to $1.76tr. The report also shows how women are disproportionately affected by inequality – of the current ‘62’, 53 are men and just nine are women.
Although world leaders have increasingly talked about the need to tackle inequality, and in September agreed a global goal to reduce it, the gap between the richest and the rest has widened dramatically in the past 12 months. Oxfam’s prediction, made ahead of last year’s Davos, that the 1% would soon own more than the rest of us, actually came true in 2015 – a year earlier than expected.
Oxfam is calling for urgent action to tackle the extreme inequality crisis which threatens to undermine the progress made in tackling poverty during the last quarter of a century. As a priority, it is calling for an end to the era of tax havens which has seen the increasing use of offshore centers by rich individuals and companies to avoid paying their fair share to society. This has denied governments valuable resources needed to tackle poverty and inequality.
Winnie Byanyima, Oxfam International Executive Director, who will again attend Davos having co-chaired last year’s event, said: “It is simply unacceptable that the poorest half of the world’s population owns no more than a few dozen super-rich people who could fit onto one bus.”
“World leaders’ concern about the escalating inequality crisis has so far not translated into concrete action – the world has become a much more unequal place and the trend is accelerating. We cannot continue to allow hundreds of millions of people to go hungry while resources that could be used to help them are sucked up by those at the top.
“I challenge the governments, companies and elites at Davos to play their part in ending the era of tax havens, which is fuelling economic inequality and preventing hundreds of millions of people lifting themselves out of poverty. Multinational companies and wealthy elites are playing by different rules to everyone else, refusing to pay the taxes that society needs to function. The fact that 188 of 201 leading companies have a presence in at least one tax haven shows it is time to act.”
In 2015 G20 governments agreed steps to curb tax dodging by multinationals through the BEPS agreement, however these measures will do little for the poorest countries and largely ignore the problems posed by tax havens.
Globally, it is estimated that a total of $7.6tr of individuals’ wealth sits offshore. If tax were paid on the income that this wealth generates, an extra $190 billion would be available to governments every year.
As much as 30 percent of all African financial wealth is estimated to be held offshore, costing an estimated $14 billion in lost tax revenues every year. This is enough money to pay for healthcare for mothers and children in Africa that could save 4 million children’s lives a year, and employ enough teachers to get every African child into school.
Nine out of ten WEF corporate partners have a presence in at least one tax haven and it is estimated that tax dodging by multinational corporations costs developing countries at least $100 billion every year. Corporate investment in tax havens almost quadrupled between 2000 and 2014.
Allowing governments to collect the taxes they are owed from companies and rich individuals will be vital if world leaders are to meet their new goal, set last September, to eliminate extreme poverty by 2030.
Although the number of people living in extreme poverty halved between 1990 and 2010, the average annual income of the poorest 10 percent has risen by less than $3-a-year in the past quarter of a century. That equates to an increase in individuals’ daily income of less than a single cent a year.
Had inequality within countries not grown between 1990 and 2010, an extra 200 million people would have escaped poverty.
One of the other key trends behind rising inequality set out in Oxfam’s report is the falling share of national income going to workers in almost all developed and most developing countries and a widening gap between pay at the top and the bottom of the income scale. The majority of low paid workers around the world are women.
By contrast, the already wealthy have benefited from a rate of return on capital via interest payments, dividends, etc., that has been consistently higher than the rate of economic growth. This advantage has been compounded by the use of tax havens which are perhaps the most glaring example set out in the Oxfam report of how the rules of the economic game have been rewritten in a manner that has supercharged the ability of the rich and powerful to entrench their wealth.
Oxfam is calling for action against tax havens to be part of a three-pronged attack on inequality. Action to recover the missing billions lost to tax havens needs to be accompanied by a commitment on the part of governments to invest in healthcare, schools and other vital public services that make such a big difference to the lives of the poorest people.Governments should also take action to ensure that work pays for those at the bottom as well as for those at the top – including moving minimum wage rates towards a living wage and tackling the pay gap between men and women.
Byanyima added: “The richest can no longer pretend their wealth benefits everyone – their extreme wealth in fact shows an ailing global economy. The recent explosion in the wealth of the super-rich has come at the expense of the majority and particularly the poorest people.”
In addition to its inequality campaign, Oxfam will be attending Davos to press world and business leaders to tackle climate change and act to resolve humanitarian crises including that in Syria.
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tralac’s Daily News selection
The selection: Tuesday, 19 January 2016
AfDB launches 'High-Fives' application (AfDB)
The High-Fives application is designed to give periodic information about the performance of African countries in these priority areas and create opportunities for timely corrective action. It is also intended to serve as a unified tool to help track progress in meeting the High 5s agenda within the Bank and in addressing Africa’s transformative agenda. Through the High-Fives application, users can access a wide range of priority-area development data compiled from multiple international and national official sources, perform visual data comparison across time and countries, run ad-hoc analyses, and download results to external formats, such as MS Word, Excel, PowerPoint etc. [Download the app]
Trade facilitation and paperless trade survey 2015 (UN)
Notwithstanding the “buy-in” of the trade facilitation agenda by African countries, one of the key challenges in assessing the degree of implementation of reforms, and their impact on the real economy has traditionally been the lack of systematic and reliable information about what is happening on the ground. The present report represents a key step in tackling this very issue; it provides the basis for a more evidence-based discussion of trade facilitation in Africa, and for better tailoring capacity building and technical support in designing and implementing trade facilitation strategies. The report presents and analyses the findings of the Global Survey on Trade Facilitation and Paperless Trade Implementation, a joint initiative of the five United Nations Regional Commissions, in cooperation with other interested international organizations. [Download Africa report, Global report]
How digital trade is transforming globalisation (E15 Initiative)
SADC Trade Related Facility: call for applications (SADC)
This Call for applications, is a rolling call which will remain open until 16 January 2017, the deadline for submission of applications. Member States may submit applications at any moment in time. Evaluation of applications will commence after every cut-off date. Three cut-off dates have been established for evaluation purposes, the first being 29 February 2016, the second being 22 July 2016 and the final being 16 January 2017. Member States will be expected to indicate if they need technical assistance for conceptualization of projects and developing the applications. [Downloads available]
Sub-Saharan Africa: Agility Emerging Markets Logistics Index 2016
For the first time, logistics professionals see consumer spending in Africa as a more important driver of growth than energy and minerals. They identified Nigeria, South Africa, Ghana and Kenya as Africa’s most promising markets. In spite of recent growth and investment, Sub-Saharan Africa remains a frontier market for most supply chain executives as only 21.2% said they have operations there. For the first time, supply chain professionals surveyed see India – rather than China – as the emerging market with the most growth potential. [Download]
African container trades is growing exponentially despite bottlenecks and ports inefficiency (Hellenic Shipping News)
In the mind of many, this study’s part of Africa forms an altogether insignificant trade. That may be true if comparing it with a high volume area such as the Far East. Yet, this region’s combined port throughput is approaching 8 million TEU, which is technically more than the whole of the Australian continent. And then, there is so much scope for growth of these 23 different African countries with their 437 million inhabitants. Imagine that the East and Southern Africa container trades would catch up, relatively and in one year’s time, with that of the USA with its population of 323 million. In that case, the relevant African TEU volume would grow to 42 million TEU, up 1,200% from the 3.2 million TEU of 2014. A period of 25 years may be more realistic. This would then translate into a compound annual growth rate of nearly 11%! [Dynamar’s East and Southern Africa Container Trades report - subscription details]
Rwanda: Govt to set up logistics platform to facilitate international trade (New Times)
The Ministry of Trade and Industry has signed a 25-year renewable concession agreement with Dubai Port World to develop and operate a logistics platform, expected to boost international trade and competition in external market. The envisaged Kigali Logistics Platform refers to a defined inland location for the consolidation and distribution of goods that has functions similar to those of a seaport and which includes customs clearance services. The logistics infrastructure to be located in Masaka, Kigali, will offer different services such as a depot to enable cargo trucks from Mombasa and Dar es Salaam ports to load and offload containers without delay, according to Trade and Industry minister Francois Kanimba.
Egypt to have 12 logistics centres in Africa within 3 years (Zawya)
The Egyptian Exporters Association – Expolink is planning to establish 12 logistics centres in a number of African nations in three years, its chairman Khaled El Mikati said Monday. The first logistics centre will be established in Kenya's capital, Nairobi in the first quarter of 2016, El Mikati added, saying the EEA is set to visit the country by end of current January to discuss final details of the project.
Malawi: Unlocking trade opportunities through rail transport (Malawi News Agency)
Recently, the Malawi Ministry of Transport and Public Works gave a go-ahead for the renewal of a contract between the Central and East African Railways and the Zambian Railways Limited for the latter to operate trains in Malawi. Magwede said the company had pushed into the corridor three locomotives and seventy wagons which will be carrying goods between Chipata in Zambia and Nacala Port in Mozambique.
India: Our logistics are a major trade barrier (The Hindu)
An emerging economy such as India needs to expand international trade to sustain 7-8% growth. At present, exports contribute only 16% to India’s GDP - low compared to peers such as China (34%), South Africa (27%) and Indonesia (26%). Further, increasing supply of a semi-skilled, young labour force demands manufacturing growth supported by exports that would generate employment opportunities. Therefore, the implementation of sound trade facilitation policies for low trade and transaction costs is a prerequisite to attract investors to make in India and consider it their manufacturing hub.
Southern Africa: funding shortfall threatens UN efforts to counter El Niño-exacerbated drought (UN)
Worst affected by last year's poor rains are Malawi with 2.8 million people facing hunger, Madagascar with nearly 1.9 million, and Zimbabwe with 1.5 million and last year's harvest reduced by half compared to the previous year due to massive crop failure. In Lesotho, the Government has declared a drought emergency and some 650,000 people, a third of the population, do not have enough food. As elsewhere, water is in extremely short supply for both crops and livestock. Also causing concern are Angola, Mozambique and Swaziland. Food prices across southern Africa have been rising due to reduced production and availability. The price of maize, the staple for most of the region, is 73% higher in Malawi than the three-year average for this time of year. [WFP statement]
This document builds on Oxfam’s recent briefing, ‘Entering Uncharted Waters: El Niño and the threat to food security,’ and calls on the affected governments, regional bodies and the international community to work together in early response and preparedness in the face of an unfolding crisis. Key messages:
Related: Uganda awarded grant to prepare strategic programme for climate resilience (AfDB), South Africa: Agriculture will feel the heat for years after dry spell (Business Day), Communique: 8th Berlin Agriculture Ministers's Summit 2016
South Africa: mode of travel for tourism (StatsSA)
In October 2015, 185 449 (89,1%) of overseas tourists arrived in the country by air, whilst 21 792 (10,5%) came in by road. This is in contrast to the number of tourists from the Southern African Development Community countries who came into South Africa predominantly by road [487 854 (92,9%)]. Only 37 450 (7,1%) tourists from SADC countries came in by air. The number of tourists who came into South Africa by air from 'other' African countries was 12 970 (92,2%), with 1 094 (7,8%) using road transport.
Zimbabwe: ‘Ebola, tax spur 20% tourism arrivals drop’ (NewsDay)
Tourist arrivals in Victoria Falls, Zimbabwe’s prime resort, were down 20% in 2015 compared to the corresponding year due to the Ebola virus after-effects as well as tax introduced on foreign tourists, an industry official has said.
Where rich Africans hide their billions (IPPMedia)
Thirty per cent of all African financial wealth is held in offshore banking, costing an estimated $14billion (30.8trillion/-) in lost tax revenues every year, says a new report released yesterday by Oxfam International. It says that in South Africa, the continent’s economic superpower, the inequality is particularly staggering –with just two men owning the same amount of wealth as the poorest half of the over 50 million population. [Download]
The road to regional integration (Crown Agents, The Guardian)
Crown Agents recently launched a project working with the African Development Bank on Zimbabwe’s Regional Trade Integration Strategy Paper Programme. RISP will provide the Government of Zimbabwe with a strategic approach to regional integration - both at a sub-regional and continental level - ultimately enhancing Zimbabwe’s presence in the global market-place, and increasing its intra-regional trade. [The author, Jon Walden, is Senior Adviser in Customs and Trade Facilitation at Crown Agents]
Reflecting on IGAD’s last 30 years and envisaging the next (IGAD)
Mauritius-EU: fourth political dialogue (Government of Mauritius)
The Foreign Affairs Minister underscored that the EU is the most important development partner for Mauritius and the only development partner providing direct budget support. He stated that the EU remains the most important market for Mauritius, accounting for approximately 70% of the country's export and that access to the EU market remains a priority for the Government. He also highlighted the current challenges that are being faced by Mauritius which include the blacklisting of Mauritius by some EU countries as a non-cooperative tax jurisdiction; the difficulties in the negotiations on full Economic Partnership Agreement between the EU and the Eastern and Southern African region, to which Mauritius belongs; the decision of the EU to abolish sugar quotas by 2017; and the negative impact of the extension of Autonomous Tariff Rate Quota to non-ACP Countries for certain fisheries products for the period 2016-2018 on tuna loins exported to the EU.
Ethiopia: Business people’s views of paying taxes (ICTD)
Based on data obtained from a survey of business taxpayers in Addis Ababa, the study finds a statistically significant relation between tax-compliance attitude and factors such as the perception of probability of audit, corruption, satisfaction with the tax administration, peer influence, gender and education. The study emphasises the need for better understanding of why taxpayers are dissatisfied with the tax administration, including perceptions of corrupt practices.
Burundi: EALA Committee on Regional Affairs and Conflict Resolution hearing (EAC)
EALA has responded to the Government of Burundi welcoming its decision to participate in the Public Hearing Workshop. The Assembly has thus set aside January 25th, 2016 as the new date to hold its second public hearing and notified the Government of the Republic of Burundi of the same. Any other stakeholder who has views to share with the Committee is also invited to attend the Public hearing upon prior arrangement. Once finalised, the Committee shall retreat and prepare its Report.
SADC suspends activities in Lesotho (eNCA)
SADC has decided to suspend all its activities in Lesotho until the bloc meets in August. There it wants the summit to suspend Lesotho if it refuses to accept the Judge Phumaphi report. But President Zuma says SADC will release that report without Lesotho consensus. SADC Executive Secretary, Dr. Stergomena Tax, says a full communiqué will be released on Tuesday.
Namibia: New property bill might discourage foreign investment - IPPR (New Era)
Services more than half of China 2015 GDP (Xinhua)
Chinese small commodities centre doing more trade with Africa (FOCAC)
Prof L Alan Winters: Harnessing trade for development in Africa - think mobility (pp38-43 in ACTS January newsletter)
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African container trades is growing exponentially despite bottlenecks and ports inefficiency
Dynamar recently launched a review of container trades in the region of East and Southern Africa. According to the report, the area has produced a significant growth, despite challenging conditions in many ports, in terms of infrastructure and other various bottlenecks, mainly associated with inland transportation.
In the mind of many, this study’s part of Africa forms an altogether insignificant trade. That may be true if comparing it with a high volume area such as the Far East. Yet, this region’s combined port throughput is approaching 8 million TEU, which is technically more than the whole of the Australian continent. And then, there is so much scope for growth of these 23 different African countries with their 437 million inhabitants.
Imagine that the East and Southern Africa container trades would catch up, relatively and in one year’s time, with that of the USA with its population of 323 million. In that case, the relevant African TEU volume would grow to 42 million TEU, up 1,200% from the 3.2 million TEU of 2014… A period of 25 years may be more realistic. This would then translate into a compound annual growth rate (CAGR) of nearly 11%!
Exaggerated? A bit perhaps, but combined, East and Southern Africa including the Indian Ocean Islands have seen full container volumes growing by a CAGR of over 9% since 2010. This backed up by the value of their merchandise trade expanding by more than 26% to USD 385 billion over the same period.
Littorals and megalomaniac terminal projects
Although three carriers, CMA CGM, MSC and Simatech are nowadays serving Mogadishu, Somalia including Somaliland and Puntland is still largely defunct. Hence, East Africa currently counts just two active littoral countries: Kenya and Tanzania. These serve a more than seven-country hinterland, comprising a population of well over 200 million souls, more than double their own. Altogether, an indication of the increasing pressure on their ports to serve such an extensive and economically growing inland area via often physically inadequate connections larded with numerous checkpoints, if not roadblocks.
Mombasa (Kenya), expecting its current 1.0 million TEU throughput to double by 2020, is building a new 1.2 million TEU container terminal, after recently having expanded its existing one. Contender for various inland destinations Dar-es-Salaam (Tanzania) has longstanding plans and a long shortlist of no less than ten companies to build a new, 600,000 TEU box facility, doubling present capacity. In addition, some multipurpose berths will be strengthened to handle containers.
“Bagamoyo, opposite Zanzibar and 75-kilometre north of Dar-es-Salaam, was the capital of former German East Africa. China Merchants (Holding) International and Oman have jointly funded the USD 11 billion(!) to build a 20 million(!) TEU capacity container port there. However, it is still not excluded that preference will be given to the southern port of Mtwara, near the border with Mozambique,” said Dynamar.
Landlocked revisited
Yet, inland connections constitute a lifeline for the eleven East & Southern Africa landlocked countries of (in alphabetical order) Burundi, Botswana, Ethiopia, Lesotho, Malawi, Rwanda, South Sudan, Swaziland, Uganda, Zambia and Zimbabwe, to which the south-eastern part of the Democratic Republic of The Congo should be added.
Indian Ocean mixtures
The Indian Ocean Islands comprise some of the smallest territories, think of the French Département d’Outre-Mer Mayotte with its 376 square kilometres. By contrast, Madagascar is the world’s largest single island nation (582,000 sq km), boasting at least 13 sea ports. The government of Mauritius aims at transforming the island into a high-income country by 2025. Hence, Mauritius Container Terminal at Port Louis is being expanded to accommodate the expected 1.0 million TEU container throughput by then, around double the present volume of which 55% is transhipment.
Southern and South
South Africa is the largest of the only three littoral Southern African countries and the single African G-20 member. Durban, its main outlet, is the largest of the only four Sub-Saharan African millionaires by container throughput. The building of a new, 9.6 million TEU capacity port at the site of the former airport has been continuously delayed but is now to start by 2021. Like all South African ports, it will be operated by parastatal Transnet.
In a remarkable second week of December last, the South African government had three finance ministers at a row… If this 55-million people country’s outlook remains weak (2.5% average until 2020), it is mainly due to severe domestic challenges.
Namibia is the only country in the Dynamar study wholly situated on Africa’s other side. Through the Trans Kalahari Corridor, landlocked Botswana is connected to Walvis Bay, one of the best natural ports of the whole western coast of Africa. Exploiting its abundance of solar and gas energy potential, Botswana aims to become a net exporter of power by 2018.
Annual trade capacity
The combination of worldwide operating carriers, vessel capacities, services, frequencies and trade connections between East Africa, Southern Africa and the Indian Ocean Islands in the report provide a (one-way) Annual Trade Capacity of approaching 3.7 million TEU.
The Dynamar Container Trades Reports Series
Since 2004 Dynamar has been publishing reports on specific container liner trades. Having evolved from being single shipping‐lane studies, these Trade Reports now cover all direct trade lanes connecting with one specific area. In essence, these off‐the‐shelf consultancy studies provide for all those with an interest in a particular trade an in‐depth survey of the current state of the trade under review through:
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An assessment of the size of the trade (full container carryings, trade capacity, port throughputs)
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An in‐depth competition inventory (carriers, services, capacity analyses)
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The container trade in context (commodities moving, merchandise trade volumes, economies)
This publication is the third for this particular trade and follows in the wake of the mid‐2011 and mid‐2013 surveys. As such a number of comparisons have been drawn throughout between this current study and its predecessors. This 2015 edition of the East and Southern Africa trades study covers the following key areas:
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An Executive Summary of key themes, figures, conclusions and forecasts
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An Introduction defining the region and major themes
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Major vessel operating carrier developments and ESAf trade related profiles of those currently deploying tonnage
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Summaries of all direct liner trades connecting East Africa, Southern Africa and the Indian Ocean Islands, looking at:
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Services
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Vessel operating carriers
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Ports called, both in ESAf and the partner end
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Trade lane carryings and freight rates
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Summary of vessels deployed
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Ports and terminals:
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Summarised port/terminal developments
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Throughputs for major ESAf ports called
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Profiles of the major global/regional and private container terminal operators in ESAf
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Merchandise trade and regional/national economic contexts
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Individual, statistically based, ESAf country profiles
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Stop Press of major developments occurring whilst this study was in preparation
…all supported by more than 100 tables and another 35 figures. This wide range of factors and subjects make these reports also of particular interest to all stakeholders in the trade areas, including: consultants, container leasing companies, financiers, forwarders, NVOCCs, port authorities, port developers, shippers, terminal operators, training institutes and others.
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Global executives see emergence of Sub-Saharan Africa as consumer market
Logistics professionals eye growing middle class, but many still wary of entry
Consumer spending by a fast-growing middle class is as important a growth driver for Africa as mineral and resource demand, according to a new survey of global logistics executives.
In the survey, which is part of the 2016 Agility Emerging Markets Logistics Index, industry executives rank South Africa, Nigeria, Kenya and Ghana as the most promising markets in Sub-Saharan Africa. Poor infrastructure, lack of power generation and corruption continue to pose the most risk to African economies, according to the more than 1,100 executives responding to the survey.
Despite recent growth and surging foreign investment, Sub-Saharan Africa remains a challenging frontier for many. Only 21.2% of logistics industry executives surveyed said their companies have operations there. Another 12.7% said they are in the planning stages to enter African markets. More than 43% said they have no plans to set up in Africa.
“The results show a serious disconnect between the perception of the market and actual opportunities. These are some of the world’s fastest-growing economies. Africa’s requirement for logistics services and supply chain expertise is huge and growing every day. At the same time, many of the companies that need logistics to enter the market don’t know how to get started in Africa or aren’t willing to take the risk,” said Geoffrey White, CEO of Agility Africa. “The market is open for first movers who can navigate risk and nurture African talent. The opportunity is for those seeking to build long-term, sustainable businesses that bring world-class practices and adapt to local conditions.”
The Agility Emerging Markets Logistics Index, now in its 7th year, offers a snapshot of logistics industry sentiment and ranks the world’s 45 leading emerging markets based on their size, business conditions, infrastructure and other factors that make them attractive to logistics providers, freight forwarders, shipping lines, air cargo carriers and distributors.
China, the world’s second-largest economy, remains the leading emerging market by a large margin. Among the countries at the top of the Index rankings this year, UAE (No. 2), India (3) and Malaysia (4) leaped over the commodity-dependent economies of Saudi Arabia (5), Brazil (6) and Indonesia (7). Rounding out the top 10 are Mexico (8), Russia (9) and Turkey (10).
The leading markets in Sub-Saharan Africa are South Africa (No. 16) and Nigeria (17). South Africa has Africa’s most advanced logistics industry and transport infrastructure, but its economy has been hobbled by chronic power shortages, slumping commodity prices, a plunging currency and labor unrest.
Nigeria climbed 10 spots in the 2016 Index, tying Egypt (No. 22) for the biggest gain by any country in the seven years since the Index was first published. Nigeria’s enormous potential has become clearer since its recent decision to update the methods by which it collects economic data. Even so, its economy is heavily reliant on oil and has been hurt by low energy prices.
Other countries in the region fall toward the bottom of the rankings: Ethiopia (37), Tanzania (40), Kenya (43) and Uganda (45). Among countries in North Africa, Morocco ranked No. 20, trailed by Egypt (22), Algeria (30), Tunisia (36) and Libya (41).
Other Index findings:
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UAE, home to the powerhouse economies of Dubai and Abu Dhabi, has the best business climate and the best “connectedness,” a measure of infrastructure and transport connections, of any emerging market. As a result, UAE ranks as the world’s No. 2 emerging market after China, even though China’s economy is 25 times larger; India’s is five times larger; and Brazil’s is six times larger.
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UAE, Malaysia, China, Chile lead in “connectivity,” meaning they have the best infrastructure and transport links, along with the most efficient customs and border administration.
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Nigeria’s size and growth suggest it should rank near Brazil (No. 6) or Mexico (8) in the overall Index. But Nigeria is no more business friendly than Venezuela and Uganda, and its weak infrastructure, transport links and customs regime puts it with Bangladesh, Ethiopia and Tanzania in “connectivity.”
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Among countries in Sub-Saharan Africa, South Africa has the best “connectivity.” In North Africa, Morocco has the best business climate and connections.
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Countries in Latin America are losing ground to other emerging markets as a result of recession and political turmoil in Brazil, the region’s biggest economy, and depressed prices for commodity exports. Of the 10 countries that slipped furthest in the Index, six are in Latin America: Peru, Argentina, Uruguay, Brazil, Colombia and Venezuela. Even so, Chile continues to be the top-ranked emerging market with GDP under $300 million.
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Russia, hurt by Western sanctions and isolated economically since it began backing rebels in Ukraine and intervened militarily in Syria, fell from No. 7 to No. 9 in the Index. Tension with Russia and the loss of economic output in the breakaway Crimea region have hurt Ukraine, as well. Ukraine fell four spots to No. 34.
Other survey findings:
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Industry executives view oil prices and China’s economy as the leading risks to the global economy in 2016. Both represent potential threats for some Sub-Saharan economies. Mozambique, Uganda, Tanzania and others want to exploit huge new energy finds but are hamstrung by low prices. China, the leading buyer for African minerals and other key commodities, will buy less as its economy slows.
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Logistics executives see “economic shock” as the top risk in Asia Pacific, a sign of concern that a slowdown in China could ripple through economies and supply chains elsewhere in the region. A significant percentage (38%) said they are reassessing their China strategies. In the past, industry executives said natural disasters and corruption were the top risks in Asia.
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The logistics industry is intrigued by the possibility that Iran could emerge from its long economic isolation as the result of an agreement to curtail its nuclear program. In the survey, Iran moved up 12 spots – from No. 27 to No. 15 – among countries with potential as major logistics markets.
“It was a volatile year for emerging markets, and you see that in the Index. Eight of the top 10 emerging markets shifted places,” said Essa Al-Saleh, President and CEO of Agility Global Integrated Logistics. “Despite the turbulence, the fundamentals driving growth remain consistent – a rising middle class with spending power, progress in poverty reduction, growing populations. That’s why we are still positive on the outlook for emerging markets and see them driving global growth.”
Transport Intelligence (Ti), a leading analysis and research firm for the logistics industry, compiled the Index.
John Manners-Bell, Chief Executive Ti, said: “The world’s economy is still riven by instability, and emerging markets such as China and Brazil have not been immune. However others, such as Mexico, are in a far stronger position and will benefit from the economic growth experienced in the U.S. and Europe. More than ever, investors in emerging markets need to be discerning and the results of our Index are critical to providing clarity in a confusing and complex world.”
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United Nations report highlights implementation gaps in cutting red tape for international trade
The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), together with all four other United Nations regional commissions, launched the first global report on the implementation of measures to simplify import, export and transit procedures in October 2015, calling for more to be done to cut trade costs and promote growth.
The inaugural Global Report of the Trade Facilitation and Paperless Trade Implementation Survey provides data for 119 countries and serves as a useful basis for bench marking and monitoring trade facilitation performance. Within the Asia-Pacific region, the report shows Singapore and the Republic of Korea leading East Asia in moving goods effectively. India tops the South Asian subregion, with Russia and Turkey leading in Europe and Central Asia. The top trade facilitation performer among these economies is the Netherlands.
According to the report, efficient movement of goods is key to maintaining trade competitiveness, and enabling effective engagement of firms, in particular small and medium enterprises, with regional and global production networks. The global average implementation rate of the ambitious set of trade facilitation measures considered in the report is about53 per cent. Developed economies average more than 75 per cent implementation, while Pacific Island developing economies barely reach 26 per cent.
As highlighted in the report, accelerating implementation of paperless trade measures will be crucial to reducing trade costs. The report also recommends the adoption of modern information and communication technologies, as well as development of legal frameworks to enable the exchange of electronic trade data and documents across borders.
United Nations Under-Secretary-General and Executive Secretary of ESCAP Dr. Shamshad Akhtar said: “These ‘next generation’ trade facilitation measures have great potential to reduce costs and boost trade, increasing the Asia-Pacific region’s export potential by more than$250 billion annually. This can only be achieved, however, through more effective cooperation between countries at the regional and global levels.” Dr. Akhtar added that more than 20 ESCAP member States are already actively engaged in developing an innovative regional agreement for the facilitation of cross-border paperless trade, and she encouraged other Asia-Pacific member States to participate.
The report outlines the extent to which key measures of the recent World Trade Organization Trade Facilitation Agreement are currently being implemented, showing that a significant number of developing economies, particularly in East Asia, Latin America and the Caribbean, have already acted on many of the commitments associated with the arrangement. For most countries, however, much still remains to be done. An integrated step-by-step approach is suggested, starting with building up institutional arrangements and inter-agency cooperation.
Overall, the report finds that most economies have already taken concrete steps towards streamlining trade procedures. The United Arab Emirates leads the Middle East and North Africa region and Benin and Mauritius lead in Sub-Saharan Africa. Several leaders emerge in Latin America and the Caribbean including Mexico, Colombia, Ecuador and Chile.
The survey, led by ESCAP, was developed in collaboration with the Organisation for Economic Co-operation and Development (OECD) and implemented by all of the United Nations regional commissions, namely: the UN Economic Commission for Africa (ECA), the UN Economic Commission for Europe (ECE), the UN Economic Commission for Latin America and the Caribbean (ECLAC), and the UN Economic and Social Commission for West Asia (ESCWA). The report was produced with the support of the United Nations Conference on Trade and Development, (UNCTAD), the International Road Transport Union (IRU), the International Trade Centre, (ITC), OCO and the Latin American and Caribbean Economic System (SELA).
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How digital trade is transforming globalisation
The spread of digital technologies is transforming all types of global flows – those of goods, services, money, and people – and this transformation is only in its earliest stages. Already, more and more of people across the globe engage in instantaneous cross-border exchanges of digital goods, from books and music to design files that enable 3-D printing of physical objects. As the infrastructure that supports the Internet expands, barriers of distance and cost that once seemed insurmountable have begun to fall away.
Digital trade represents an important, albeit hard-to measure, component of these global flows. As it grows, develops, and assumes new forms, it is both facilitating globalisation and transforming it. Digitisation lowers marginal production and distribution costs, while broadening access to global commerce. The cost of participating in trade is reduced not just for large companies, but also for individuals, small firms, and entrepreneurs. This is already spurring innovations in business models and spawning the emergence of micro-multinationals, micro-work, and microsupply chains that are able to tap into global opportunities.
The Internet of Things (IoT) – the ability to monitor and manage objects in the physical world electronically – will enhance and accelerate these developments. Digitisation has already had a significant impact on trade by transforming logistics and supply chains; companies can readily track and collect information about a product, place, time, or transaction using sensors or other digital “wrappers,” to improve their operating efficiency and reduce costs. This process, too, is at an early stage, and we believe that its impact could be considerable over the next decade. Manufacturers and oil and gas companies, among others, have already begun to see the initial payoff from IoT technologies in their operations. From monitoring machines on the factory floor to tracking the progress of ships at sea or parcels being shipped across frontiers, digital technologies are helping companies get far more out of their physical assets.
The digitisation of global flows has been a key contributor to the explosive growth of cross-border data flows. Crossborder Internet traffic has increased 500-fold since 2000 – and with conservative assumptions will expand another eightfold by 2025. Together, these transformations will have broad implications for the future of globalisation. They will impact companies large and small, in emerging economies as well as in developed ones. Governments will be challenged to adapt their regulatory and taxation systems to deal with this upsurge in digitisation and digital trade. Policymakers will need to address sensitive issues around data security, privacy, and Internet governance. Trade agreements must be updated to reflect the new realities of global commerce and expanded to address new forms of cross-border commerce and customs procedures.
This paper examines three ways this transformation process is taking place: through cross-border flows of purely digital goods; by using “digital wrappers” to enable physical flows of goods – an essential component of the “Internet of Things”; and through the creation of online platforms for production, exchange, and consumption.
Large and small companies, as well as individual entrepreneurs and consumers, in both developed economies and the emerging world will be increasingly affected by these developments, which constitute both an opportunity and a competitive challenge. For governments and policymakers, the rapid transformation of digital trade raises important issues that will need to be addressed, including lingering barriers to its growth, appropriate ways of measuring it, and questions about governance and data security.
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Why SDGs could transform Africa
Embracing and financing the sustainable development goals could help Africa develop, writes Alberto Leny.
Africa is in the limelight as the world ushers in the post-2015 development agenda.
The World Bank statistics indicate that 75 per cent of the world’s poorest countries are located in Sub-Saharan Africa, including ten with the highest proportion of residents living in extreme poverty.[1]
World leaders passed a resolution to adopt the new 2030 Agenda for Sustainable Development last year (25 September) at the United Nations General Assembly in New York, United States[2]. The Sustainable Development Goals (SDGs), which has succeeded the Millennium Development Goals (MDGs), could mark a turning point for Africa.
SDGs aim to end extreme poverty, hunger and inequality, tackle climate change and build resilient infrastructure to meet Africa’s urgent priorities – economic growth, achieving access to safe drinking water and energy, and investments in agriculture.
“Despite the optimism, researchers and public policy for development analysts are still looking for answers to the burning questions confronting the continent.” Alberto Leny, SciDev.Net
The debate on Africa’s transformation from a continent characterised by uneven, unstable and irregular development patterns to one of sustained economic growth and diminished poverty continues among scholars, planners, policymakers and decision-makers at the local and international levels.
Are the 17 SDGs and 169 targets the panacea to Africa’s faltering perennial struggle to stimulate growth and combat poverty?
Monitoring the major meetings across the globe in 2015, the international development debate has mainly focused on the problem of poverty and how to reduce it.
Growth and prosperity
This is Africa’s greatest hope of transformation from desperation to growth and prosperity.
Indeed, the first of the 17 SDGs considers Africa’s monumental challenges, as it seeks to “end extreme poverty in all its forms everywhere” by 2030.
However, despite the optimism, researchers and public policy for development analysts are still looking for answers to the burning questions confronting the continent: What makes Africa the poorest region in the world? How can the sustainable and broad-based economic growth necessary to solve this complex task be delivered to offload the heavy burden that weighs down the continent? What is the role of science, technology, innovation and industrialisation in this equation?
The UN secretary-general Ban Ki-moon said the SDGs are in sync with Africa’s priorities and could transform the continent. Speaking a day after the adoption of the SDGs at an event organised by the non-governmental organisation Global Citizens and attended by prominent personalities in world politics, social activism, business and entertainment, Ki-Moon is reported to have said: “Let’s make the global goals a global reality. These goals are a promise from your leaders. Hold them to it. Demand that they deliver.”[3]
The UN chief added that SDGs aim to end poverty, hunger and inequality, tackle climate change and build resilient infrastructure.
In July last year, he addressed the Third Forum for Inclusive and Sustainable Industrial Development (ISID) in Addis Ababa, Ethiopia, ahead of the adoption of the SDGs and described 2015 as “a critical year in charting a common framework for future development in a balanced and integrated manner”.[4]
Financing SDGs
Africa’s leaders know that for the continent to achieve the lofty goals, financing the implementation of SDGs requires substantial investment. At the ISID forum in Ethiopia last year, African Union (AU) chairperson Nkozasana Dlamini-Zuma charted the way forward, urging leaders to take practical steps to apply research, science, technology and innovation to drive the continent’s development.[5]
The forum was also addressed by top leaders, including the World Bank Group president Jim Yong Kim, United Nations Economic Commission for Africa executive secretary Carlos Lopes, United Nations Industrial Development Organization director-general LI Yong, prime minister of Ethiopia Hailemariam Desalegn, the European Commission director-general for International Cooperation and Development Fernando Frutuoso de Melo and the minister of economy, finance and planning of Senegal Amadou Ba, who represented President Macky Sall.
The leaders underscored the importance attached to financing the SDGs, which the developing world, Africa included, will greatly depend on in the post-2015 agenda.
“We either unite or collectively perish, as no single country or region can be an island of prosperity in an ocean of poverty, insecurity and underdevelopment.” Nkozasana Dlamini-Zuma, African Union Commission
To Dlamini-Zuma, industrialisation, one of the ninth SDGs, is paramount for Africa to adopt inclusive and sustainable industrial development as a driver for job creation, economic growth, technology transfer, investment flows and skills development. This goal commits to building resilient infrastructure, promoting inclusive and sustainable industrialisation and fostering innovation.
“We must place science as a central part of higher learning, invest in infrastructure development and agricultural modernisation and processing, and replicate successful programmes in countries such as Ethiopia and Senegal,” Dlamini-Zuma reiterated.
Dlamini-Zuma cautioned African researchers and policymakers about African youth risking their lives while crossing the Sahara Desert to make dangerous voyages across the Mediterranean Sea to seek jobs in Europe.
“Africa needs to take its own responsibility for its own development. Africa must industrialise and beneficiate,” she noted. “If we do not – given our growing large youth population – instead of getting a demographic dividend, we will get a demographic disaster, which has already started. This is a tragedy whose roots are in the underdevelopment and marginalisation of Africa.”
She said that the young men and women are making the perilous journey because there are not enough jobs and lack skills to get or create jobs.
“We have no choice but to embark on a transformative route through programmes that will eradicate poverty, because if we don’t, this disaster will engulf all of us, not just in Africa,” Dlamini-Zuma warned.
Unite or collectively perish
The solution, Dlamini-Zuma said, lies in Africa taking responsibility for its own development: “We either unite or collectively perish, as no single country or region can be an island of prosperity in an ocean of poverty, insecurity and underdevelopment,” she added.
The AU acknowledges that the SDGs offer great hope for transforming Africa, and has asked its partners to support its Agenda 2063 – the continent’s bold policy to create “the Africa we want” by 2063 – so that the continent goes beyond merely exploiting its agricultural and mineral resources and focus on industrialisation.
Endowed with vast resources, Africa can, through industrialisation, develop its oil and gas sector, and the automotive and textiles industries. Africa also bears the biggest burden of diseases but hardly develops drugs, creating a major opportunity for the development of the pharmaceutical sector.
By adopting this path and fully committing to embracing the SDGs, Africa could reach a turning point in post-2015, a period when the continent takes a bold step towards growth and transformation.
Alberto Leny is assistant regional news editor at SciDev.Net’s Sub-Saharan Africa region. This piece was produced by SciDev.Net’s Sub-Saharan Africa desk.
This article was originally published on SciDev.Net.
References
[1] The global monitoring report 2015/2016: development goals in an era of demographic change (World Bank Group, 2016)
[2] Resolution adopted by the General Assembly on 25 September 2015 (UN, 21 October 2015)
[3] Kingsley Ighobor Sustainable Development Goals are in sync with Africa’s priorities (Africa Renewal, December 2015)
[4] Ban Ki-moon Remarks at UNIDO forum on financing for inclusive and sustainable industrial development (UN, 7 July 2015)
[5] Nkozasana Dlamini-Zuma UNIDO forum financing for inclusive and sustainable industrial development (UNIDO, video published 20 July 2015)
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Funding shortfall threatens UN efforts to counter El Niño-exacerbated drought in southern Africa
With 14 million people facing hunger in southern Africa as the El Niño weather pattern, the worst in over three decades, exacerbates drought, the United Nations World Food Programme (WFP) warned on Monday that it faces critical funding challenges in scaling up food and cash-based aid.
“The number of people without enough food could rise significantly over coming months as the region moves deeper into the so-called lean season, the period before the April harvest when food and cash stocks become increasingly depleted,” WFP said in a news release. “Particularly vulnerable are smallholder farmers who account for most agricultural production.”
The cyclical El Niño pattern of devastating droughts on some regions and catastrophic floods in others that can affect tens of millions of people around the globe, is already leading to even worse drought across southern Africa, affecting this year’s crops.
With little or no rain falling in many areas and the window for the planting of cereals closing fast or already closed in some countries, the outlook is alarming.
“Driving through southern Zambia, I saw fields of crops severely stressed from lack of water and met farmers who are struggling to cope with a second season of erratic rains,” WFP Executive Director Ertharin Cousin said at the end of a visit to drought-prone southern Zambia.
“Zambia is one of the biggest breadbaskets in the region and what’s happening there gives serious cause for concern not only for Zambia itself but all countries in the region.”
Worst affected by last year’s poor rains are Malawi with 2.8 million people facing hunger, Madagascar with nearly 1.9 million, and Zimbabwe with 1.5 million and last year’s harvest reduced by half compared to the previous year due to massive crop failure.
In Lesotho, the Government has declared a drought emergency and some 650,000 people, a third of the population, do not have enough food. As elsewhere, water is in extremely short supply for both crops and livestock. Also causing concern are Angola, Mozambique and Swaziland.
Food prices across southern Africa have been rising due to reduced production and availability. The price of maize, the staple for most of the region, is 73 per cent higher in Malawi than the three-year average for this time of year.
“I’m particularly concerned that smallholders won’t be able to harvest enough crops to feed their own families through the year, let alone to sell what little they can in order to cover school fees and other household needs,” Ms. Cousin said.
WFP is working with Governments, regional organizations and other partners on contingency, preparedness to secure food supplies and protect people’s livelihoods.
WFP assessment analysts estimate that more than 40 million rural and 9 million urban people in the region live in geographic zones that are highly exposed to the fall-out from El Niño. South Africa, the major breadbasket of the region, has indicated that this El Niño-induced drought is the worst the country has suffered in more than half a century.
One particularly worrying symptom of southern Africa’s vulnerability to food and nutrition security is the alarming rate of chronic malnutrition. Levels of stunting among children in Madagascar, Malawi, Mozambique and Zambia are among the worst in the world.
This affects children’s physical growth, cognitive development, as well as their future health and productivity.
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At summit, Buhari lists effects of climate change on Nigeria
President Muhammadu Buhari on Monday stressed the need for greater global cooperation against the devastating effects of climate change to avert disaster for the human race in the 21st century.
Addressing the opening of the 2016 World Future Energy Summit at Abu Dhabi in the United Arab Emirates, Buhari reaffirmed Nigeria’s readiness to work with the United Arab Emirates and the rest of the world in a collective effort to mitigate the effects of climate change.
The summit, which is the ninth in the series, has developed into one of the world’s most influential events dedicated to advancing future energy, energy efficiency and clean technologies.
A statement by the Presidential spokesman, Femi Adesina, quoted the President as saying that “Africa is already suffering from the consequences of climate change, which include recurrent drought and floods.
“In Nigeria, the drastic drying up of the Lake Chad to just about 10% of its original size, has negatively impacted on the livelihood of millions of people, and contributed in making the region a hot bed of insurgency.
“Desert encroachment in Niger, our northern neighbor, and in far northern Nigeria, at the rate of several hundred meters per annum, has impacted on the existence of man, animal and vegetation, threatening to alter the whole ecological balance of the sub-region.”
President Buhari further told participants at the summit that “in the middle and southern part of Nigeria, land erosion threatens farming, forestry, town and village peripheries and in some areas, major highways.
“Constant and abrupt alteration between floods and droughts prove that climate change is real and therefore a global approach and cooperation to combat its effects are vital if the human race is not to face disaster in the 21st century.”
Noting that the summit was taking place soon after the United Nations Conference on Climate Change held in Paris late last year, President Buhari praised the United Arab Emirates for consistently supporting international action on climate change.
“We see Abu Dhabi as a dependable partner in the collective effort to manage climate risks, including the attainment of the sustainable development goals by 2030.
“Thank you, Abu Dhabi, for consistently continuing to support international action in this sphere. We appreciate your immense contributions worth hundreds of millions of dollars in Energy aid to developing countries,” the Nigerian leader said.
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tralac’s Daily News selection
The selection: Monday, 18 January 2016
Profiled conference alert: 2nd Annual Competition and Economic Regulation Conference (Lusaka, 11-12 March)
Profiled conference report: Trade and economic transformation session (TDS2015 Nairobi, ODI)
Competition in the road freight sector in SADC: a case study of fertilizer transport and trading in Zambia, Tanzania, Malawi (CCRED)
The efficiency and affordability of transportation, particularly in the road freight sector, is a key enabler in achieving broader industrial policy, trade and regional integration goals in the SADC region. Competition, market structure and arrangements between firms in the road freight sector – as well as the relationship between road freight operators and large importers – play an important role in determining the price and trade of commodities between countries. The paper focuses on the transportation of fertilizer in Malawi, Tanzania and Zambia in seeking to understand the role that different actors including regional economic communities, policymakers, large importers and large exporters play in influencing market outcomes in road transportation. The paper also considers the structure of markets, main players, and prices and costs in each country.
The main findings are that competitive outcomes in road freight in the context of fertilizer trading are driven by the inter-relationships between large transporters and users of transport, cross-border rivalry, and both small and large regulatory interventions to enhance outcomes in road transport. A reduction in relative prices in Zambia has been driven, among others, by a combination of increased competition in road transport and the prosecution of a cartel in fertilizer trading; whereas the benefits of entry in the Tanzanian fertilizer market may have been undermined by arrangements in transport and the entrenched position of incumbent multinational importers. In Malawi, a lack of rivalry at various levels of the value chain and regulatory barriers meant prices of fertilizer have been well above those in the comparator countries. [The authors: Phumzile Ncube, Simon Roberts, Thando Vilakazi]
Namibia: Weak Rand undermines currency link (Namibia Economist)
The recent weakening of the South African Rand has undoubtedly triggered the erosion of the primary benefits of the fixed exchange rate embedded in the Common Monetary Area agreement. The arrangement which entails that Namibia pegs its currency to the Rand has been beneficial in several ways, but since the recent downward spiral of the Rand, these benefits are gradually eroding. This situation has brought to the fore the fundamental question of whether Namibia should explore alternative exchange rate regimes that will better serve Namibia’s developmental interests. In the absence of a documented official plan B exchange rate regime, Namibia can still explore the following three basic choices: [The author, Mally Likukela, is Standard Bank’s Manager of Economics and Market Research]
China mulls Free Trade Area pact with Africa (Daily News)
Prof Hu Hailiang, the Vice-Chairman of the Social Sciences of the Ministry of Education in China, told reporters in Dar es Salaam yesterday that the envisaged free trade area falls under its new five year development plan slated to begin this year. The free trade area agreement is expected to increase exports of goods from Africa to offset huge trade imbalance between the continent and China, he said. “China will negotiate with individual African countries and regional blocks to develop free trade area agreement to promote exchange of goods and services and investments,” he said at a press conference organised after a seminar on new China.
India battles China for Kenya’s market (The Star)
India is seeking to recapture its long-held position as Kenya's largest source of imports from China. India, which has generally been the top exporter of goods to Kenya over the last three years, fell behind China after its exports dipped by 4.84% in the first ten months of 2015, provisional data from Kenya National Bureau of Statistics indicates. The value of India’s exports to Kenya dropped to Sh208.3 billion between January and October from Sh218.9 billion in the same period of 2014.
India: December exports fall 14.75% in 13th straight month of declines (Livemint)
Text of President Xi Jinping's speech at launch of AIIB (Shanghai Daily)
India received the most loans from World Bank in the past 70 years (Scroll)
Peter Drysdale: 'Get used to living with Chinese economic tremors' (editorial comment, East Asia Forum)
Justin Yifu Lin: 'Regardless of Washington's beliefs, China is vital for world's economy to survive' (RT)
BRICS member states contribute first $750m to New Development Bank (Tass)
Foods available to African farm households increase with market access and off-farm work (ILRI)
A unique dataset covering land use and production data by more than 13,000 smallholder farm households in 93 sites in 17 countries across sub-Saharan Africa is described in a paper recently published by the Proceedings of the National Academy of Sciences. Mark van Wijk, a scientist at the International Livestock Research Institute, led the study with other colleagues from ILRI and partner institutions. Excerpts from the paper, and its key messages, follow.
Towards better pastoralism policies in West and Central Africa (Premium Times)
Regional pastoralist civil society organisations like ROPPA, CORET, APESS and RBM need to assess how far these programmes have impacted on pastoralists and livestock production in the region, what the success stories are and which areas need improvement. I urge participants to take this into cognisance in making recommendations in this conference. Finally, I hope this conference will put in a place a mechanism of sustained collaboration and cooperation between pastoralists, farmers, fisher-folks and other natural resource users so that they we can speak with one voice to improve food production, food security, sustainable livelihoods and peace in our regions. [The author: Mohammed Bello Tukur is the Acting Secretary General of the Confederation of Traditional Herder Organisations in Africa]
Ethiopia: El Niño Response Plan 2016 (FAO)
Under the current El Niño, crop production in Ethiopia has dropped by 50 to 90% in some regions and failed completely in the east. The drought resulted in the loss of hundreds of thousands of livestock. The new FAO response plan aims to assist 1.8 million farmers and livestock keepers in 2016 to reduce food gaps and restore agricultural production and incomes. The first critical phase of the $50 million will focus on the meher season between January and June.
One less burden for regional food trade in Côte d’Ivoire (USAID West Africa)
In northern Côte d’Ivoire, exporters of food crops in the Bouake region will no longer have to provide certificates of origin for agricultural commodities as they cross borders as stipulated in the “Note de Service” or policy circular 01 of March 2015. Though contrary to the ECOWAS Trade Liberalization Scheme - approved decades ago to encourage free regional trade, especially of staple crops - certificates of origin are still demanded at numerous borders throughout West Africa. This creates an undue burden on agricultural traders and an opportunity for border officials to demand bribes, driving up the cost of goods.
Supporting remittance flows to Somalia (World Bank)
The project aims to tackle key challenges with the UK-Somalia remittance corridor until a sounder financial system is in place in Somalia, and to accelerate and support the development of that financial system. More specifically, this project is intended as an interim set of activities to support the supervisory role of the Central Bank of Somalia. The activities will also support the Somali Government’s plan on the formalization of the Somali financial sector. Over time, the project has evolved to include both shorter-term and longer-term elements to strengthen the systems supporting the flow of remittances to Somalia. The proposed solution is to be dealt with in two phases:
Understanding Ghana’s growth success story and job creation challenges (UNU-WIDER)
Ghana’s status as one of the African Lions is linked to the country’s remarkable growth performance, which culminated in the attainment of lower middle-income status. However, employment response to growth has been weak. Additionally, growth has been accompanied by substantial reduction in poverty, albeit increasing inequality. [The authors: Ernest Aryeetey, William Baah-Boateng]
Ghana: Port management programme continues to produce results (UNCTAD)
Two dozen managers from the two main ports of Ghana presented case studies they had conducted as part of UNCTAD's Port Training Programme. The national port authority, encouraged by the results, committed to a fourth cycle of training. A total of 81 managers have graduated from the programme.
Tanzania: Locals given mandate to take up jobs in all ports (Daily News)
Tanzania Seafarers Community (TSC) has been officially given the mandate to ensure all jobs and other services at the Country’s ports are handled by locals only. “The minister (Prof Mbarawa) has directed us (TSC) to write and inform the shipping agents about the move in order to get ready towards ensuring the locals take over the jobs,” he noted. Commenting on the readiness of the TSC to take over the jobs, Mr Chagyra said the country has enough well trained seafarers mostly youths able to take over the jobs.
Nigeria: FG to create 250000 jobs in railway sector (ThisDay)
“Government will focus on railway to encourage mass transit of and cargo freights by railway. The current government is planning massive investment into the standard gauge whose constructions will begin 2016, with the Calabar-Lagos coastal railway”. On seafarers’ development, the minister expressed dismay that opportunities for sea time experience for cadets were lacking. THISDAY checks revealed that since the Nigerian National Shipping Line Limited was liquidated in 1995, the lack of training berths have plagued Nigerian seafarers whose formal training remain incomplete until experience at sea is acquired.
Selected postings on Africa’s energy sector: India's 2015 imports of African oil highest in at least 5 yrs - trade data (Reuters), 4th India Africa Hydrocarbon Conference (21-22 January), Buhari leads Nigeria's delegation to world energy summit in UAE (Premium Times), World Future Energy Summit 2016 (18-21 January), The future of energy investment in Africa (Washington, 21 January)
New US Ambassador: 'I will help Swaziland retain AGOA' (Swazi Observer)
Nigeria: Ministers invade China, shop for FDI, tech transfer (ThisDay)
CITES calls for urgent action to maintain pressure on illegal ivory and rhino horn trade (WWF)
OECD Employment and Labour Ministerial: Building more resilient and inclusive labour markets
Harnessing emerging technological breakthroughs for the 2030 Agenda for Sustainable Development (UNCTAD)
High-Level Panel Report on Humanitarian Financing to the Secretary-General (UN)
Jay Naidoo: a commentary on the HLP report (Daily Maverick)
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Increasing world’s share of renewable energy would boost global GDP up to $1.3 trillion
Dramatically scaling up renewables in the global energy mix by 2030 would increase GDP, social welfare and employment worldwide
Achieving a 36 per cent share of renewable energy in the global energy mix by 2030 would increase global gross domestic product (GDP) by up to 1.1 per cent, roughly USD 1.3 trillion, according to new analysis by IRENA.
Renewable Energy Benefits: Measuring the Economics, released on 16 January 2016 at IRENA’s sixth Assembly, provides the first global estimate of the macroeconomic impacts of renewable energy deployment. Specifically, it outlines the benefits that would be achieved under the scenario of doubling the global share of renewable energy by 2030 from 2010 levels.
“The recent Paris Agreement sent a strong signal for countries to move from negotiation to action and rapidly decarbonise the energy sector,” said Adnan Z. Amin, IRENA Director-General. “This analysis provides compelling evidence that achieving the needed energy transition would not only mitigate climate change, but also stimulate the economy, improve human welfare and boost employment worldwide.”
Beyond finding that global GDP in 2030 would increase by up to USD 1.3 trillion – more than the combined economies of Chile, South Africa and Switzerland as of today – the report also analyses country-specific impact. Japan would see the largest positive GDP impact (2.3 per cent) but Australia, Brazil, Germany, Mexico, South Africa and South Korea would also see growth of more than 1 per cent each.
According to the report, improvements in human welfare would go well beyond gains in GDP thanks to a range of social and environmental benefits. The impact of renewable energy deployment on welfare is estimated to be three to four times larger than its impact on GDP, with global welfare increasing as much as 3.7 per cent. Employment in the renewable energy sector would also increase from 9.2 million global jobs today, to more than 24 million by 2030.
A transition towards greater shares of renewables in the global energy mix would also cause a shift in trade patterns, as it would more than halve global imports of coal and reduce oil and gas imports, benefiting large importers like Japan, India, Korea and the European Union. Fossil fuel exporting countries would also benefit from a diversified economy.
“Mitigating climate change through the deployment of renewable energy and achieving other socio-economic targets is no longer an either or equation,” said Amin. “Thanks to the growing business case for renewable energy, an investment in one is an investment in both. That is the definition of a win-win scenario.”
Renewable Energy Benefits: Measuring the Economics, builds on previous IRENA analysis on the socio-economic benefits of renewable energy and on REmap 2030, a renewable energy roadmap to doubling the global share of renewable energy by 2030. The study provides a first glimpse of the full range of benefits offered by a renewable energy transition.
» Renewable Energy Benefits: Measuring the Economics (PDF, 7.21 MB)
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China, Algeria to build mega sea port
Algeria and China on Sunday inked a 3.3-billion-U.S-dollar deal to build and exploit the new center transshipment port of Cherchell.
The agreement was signed between Algeria’s Transport Ministry, China Harbour Engineering Company (CHEC) and China State Construction Engineering Corporation (CSCEC) in Algeria.
Under the deal, the two sides will create a consortium company to build the port, some 60 km west of the capital Algiers.
Creation of the company is expected to finalize later in March 2016, with the approval from the Council of State Shareholdings and the signature of its shareholding pact.
The port will have 23 docks capable of processing 6.5 million 20-foot containers and 26 million tons of goods per year.
According to forecasts by Algeria’s Transport Ministry, port traffic in the country’s central region is expected to hit 35 million tons or two million 20-foot containers per year by 2050.
The project is planned to complete within seven years, and gradually put into service within four years with China’s Shanghai Ports Group ensuring its management.
Bringing in Shanghai Port Group “would help driving international shipment traffic coming from the Southeast Asia and other continents to pass from this Center Port, under transshipment process to continue sea transport to elsewhere, or use the Algerian highway and railway networks to carry shipments to Africa,” said Algerian Transport Minister Boudjemaa Talai.
Wen Jingfei, CHEC representative at the signing ceremony, told Xinhua that this project is important not only for Algeria but for the whole Mediterranean region and Africa.
He said the Algerian government has wanted to build this mega Central Harbor for many years, and it has positioned it as a transit port at the Mediterranean area that will provide service to North Africa and Europe.
Algeria’s landlocked neighbors such as Mali also need a port like this, he added.
Zhou Sheng, the CSCEC representative said the agreement will be a milestone in the history of Algeria, a country that is facing a rare difficult period due to the slumping.
“The Algerian government selected Chinese companies to build this project regarding the traditional friendship between the two nations and strong bilateral relationship in political, economic and cultural fields,” he said.
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OECD Employment and Labour Ministerial: Building more resilient and inclusive labour markets
On 14-15 January 2016, the OECD hosted a Ministerial meeting on Labour and Employment, and a Policy Forum on the Future of Work.
Ministers from more than 40 OECD and partner countries convened at the OECD headquarters in Paris for a rich exchange of ideas and experiences on how to build more resilient and inclusive labour markets in light of the lessons learned from the recent global economic crisis and in view of the ongoing changes in the world of work as a result of demographic shifts, technological change and globalisation. The meeting also identified priority topics for future OECD work in the employment and labour policy field.
Ministers underlined their commitment to boosting employment, particularly for young people and the long-term unemployed, tackling labour market inequalities and helping people with mental health issues find and stay in work. Ministers from the 34 OECD countries and counterparts from Colombia, Costa Rica, Kazakhstan, Latvia, Lithuania and Peru met under the chairmanship of Ms. Joan Burton, Deputy Prime Minister and Minister for Social Protection of Ireland.
During the meeting, Ministers endorsed new OECD Recommendations to promote longer working lives and to address the impact of mental health problems on health, education, employment and social outcomes.
Back-to-back with the Ministerial meeting, Policy Forum on the Future of work took place to discuss how digitisation is shaping the world of work and the implications for skills and labour market policy. The Forum brought together over 300 participants including key academics, Labour and Employment Ministers, entrepreneurs and leading representatives from the business sector and the trade unions. The discussions that took place during the Forum will shape the OECD and participating countries’ policy agenda to promote better jobs and well-being.
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Harnessing emerging technological breakthroughs for the 2030 Agenda for Sustainable Development
Effective global partnerships, sufficient financing and close cooperation between Governments and the private sector will be indispensable to harness the evolving global innovation and technology landscape and deliver the policy response required to achieve prosperity for all while preserving the planet, says UNCTAD in its latest Policy Brief.
Leveraging innovation is central for achieving the Sustainable Development Goals (SDGs) agreed by the international community in September 2015 as part of the 2030 Agenda for Sustainable Development. The expansion of the digital revolution into production processes, exemplified by what some have come to call the fourth industrial revolution, promises far-reaching development benefits, but also poses new challenges to inclusiveness.
Achieving the Goals will require realizing the potential of these new innovations not only for transforming economies, tackling vulnerability and building resilience (Goal 9), but also for attaining economic growth and decent work (Goal 8) and reducing inequality (Goal 10). To harness these benefits, a strengthened and revitalized global partnership (Goal 17) will be crucial, supported by policies that address a host of emerging issues, from translating innovation into investment to safeguarding universal benefits from productivity growth.
The contribution of innovation to development is greatest when innovation-based investment raises productivity growth and allows workers operating new machinery and software to demand higher wages, with resulting higher aggregate spending further boosting investment and the prosperity of society as a whole. Relative to the productivity gains and economic transformation engendered by the steam engine and electricity, the digital age has yet to deliver. Part of this underperformance may be due to mismeasurement, as the many products the digital economy provides for free are not captured in productivity statistics. Another possibility is that many of the benefits have yet to be seen.
Reaping the full benefits of the digital revolution is becoming increasingly likely given the move to an era of big data and what is called the Internet of Things. What is often termed the fourth industrial revolution is set to address the slowdown in productivity growth that has afflicted the world economy over the past few years. If such innovations permit the digital age to have an impact on the order of the earlier industrial revolutions, the digital economy will, sooner or later, provide universal benefits and contribute to the 2030 Agenda for Sustainable Development.
Key points:
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Expanding the digital revolution into production promises far-reaching welfare and productivity gains.
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Robotization in developed countries erodes developing countries’ traditional labour-cost advantages, while robotization in the latter reduces the potential of manufacturing to absorb surplus rural labour, the basis on which industrialization strategies have traditionally relied.
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Effective innovation policies and stepped-up capital investment can help capture benefits from digitization and tax reform may replace lost fiscal revenue from a robotized workforce.
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Enhanced social protection for freed labour, and innovation that complements the digital revolution, can help ensure inclusiveness.
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FAO presents $50 million emergency plan as Ethiopia faces worst drought in 30 years
10.2 million food insecure after major crop failure, livestock losses due to El Niño
The strongest El Niño weather episode in the last several decades has caused repeated crop failure, decimated livestock herds and driven some 10.2 million people across Ethiopia into food insecurity, FAO reported on Friday as it presented its emergency response plan to urgently protect livestock and rebuild crop production in the Horn of Africa nation.
“The outlook for 2016 is very grim,” said Amadou Allahoury, FAO Representative for Ethiopia, adding that “after two consecutive seasons of failed crops, the success of the main cropping season that starts now will be critical to preventing conditions from worsening.”
“Continued drought throughout the beginning of 2016 also means pasture will become even more scarce, which will negatively impact livestock keepers that rely on those grazing lands and water points for their food security,” he said. “Food overall will become harder to access if we continue to see prices rise, food stocks deplete and livestock become weaker, less productive, and perish.”
The El Niño phenomenon is associated with the abnormal warming of sea surface temperature in parts of the Pacific Ocean that has severe effects on global weather and climate patterns – leading to reduced rainfall and drought in some regions and heavy rains and flooding in others.
Under the current El Niño, crop production in Ethiopia has dropped by 50 to 90 percent in some regions and failed completely in the east. The drought resulted in the loss of hundreds of thousands of livestock.
According to the latest assessments, access to pasture and water will continue to deteriorate until the start of the next rainy season in March. As a result, experts anticipate that livestock will become leaner, sicker and produce less milk and many more will die.
Crop reserves are severely depleted, leaving farmers vulnerable without means of production for the upcoming planting season that starts in March – in many cases, farmers lost valuable seeds through recurrent crop failures, planting time and time again in the hopes of rains that never came.
As a result, malnutrition rates have soared and the number of admissions for severe acute malnutrition among children is now the highest ever reported.
Response plan
The new FAO response plan aims to assist 1.8 million farmers and livestock keepers in 2016 to reduce food gaps and restore agricultural production and incomes.
The first critical phase of the $50 million will focus on the meher season between January and June.
FAO plans to help 131,500 households plant with a focus on the meher season. This intervention will include a mix of emergency seed distribution, small-scale irrigation projects, and backyard gardening initiatives targeted at empowering women’s groups with tools, knowledge and access to micro loans.
As the current drought has not only affected smallholder farmers but also seed producers, it has aggravated already existing seed shortages across the country and made it even harder for farmers to plant. For this reason, FAO is also supporting 10,000 seed producers to produce high-quality seeds and get the local market for seeds back on its feet.
Another 293,000 households will benefit from livestock interventions, such as the distribution of emergency animal feed, vaccination drives to protect some 3 million animals against disease, and restocking of 100,000 goats and sheep to vulnerable households.
As many animals have been severely weakened by lack of food and water, FAO will also implement a cash-for-livestock exchange that will reimburse farmers for bringing unproductive livestock to slaughter and support community feed production.
A third leg of the response plan will focus on strengthening livelihoods of more than 30,000 households and build their resilience to future shocks. This will include cash-for-work programs that will boost families’ incomes and improve critical local infrastructure and water access for livestock. This part of the plan will also target farmers’ and women’s groups through integrated community projects that support community savings-and-loan schemes, farmer field schools and other methods to help families accumulate and diversify assets.
Rebuilding now
By focusing specifically on rebuilding the productive capacity of farming and pastoralist families, FAO is supporting ongoing efforts by the Government of Ethiopia, other UN agencies and NGO partners that are tending to the immediate needs of at-risk families.
“In Ethiopia, El Niño is not just a food crisis – it’s above all a livelihood crisis. And we need to intervene now to protect and rebuild these livelihoods and people’s capacity to produce, to prevent families from becoming long-term dependent on food aid,” said Dominique Burgeon, Leader of FAO’s Strategic Programme on Reslience and Director of FAO’s Emergencies and Rehabilitation Division.
FAO’s appeal for $50 million to protect Ethiopian livelihoods comes at a time when international donor funds are stretched thin in light of a multitude of major human-induced crises.
But intervention to secure farming livelihoods now is the best way to help the country bounce back and prevent a further slide into chronic food insecurity, according to Burgeon.
“If response is delayed, recovery will be difficult and the cost of interventions will only increase,” he stressed.
Responding to El Niño globally
Elsewhere on the African continent, El Niño has lowered crop prospects in southern Africa and many countries in the region are taking measures. South Africa has already declared drought status for five provinces, its main cereal producing regions, while Lesotho has issued a drought mitigation plan and Swaziland has implemented water restrictions as reservoir levels have become low.
To address the El Niño phenomenon globally, FAO is implementing response plans in 20 high-priority countries in Africa, Asia, Latin America and the Caribbean, and the South Pacific, including Ethiopia. Another 21 countries are being monitored closely.
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Despite age of ‘mega-crises,’ UN chief says humanitarian finance gap is a ‘solvable problem’
Highlighting that people around the world are living at an age of “mega-crises,” United Nations Secretary-General Ban Ki-moon on Sunday welcomed the launch of a new report on finding solutions to the growing gap between the increasing numbers of people in need of assistance and sufficient resources to provide relief.
“Globally, the world is shattering records we would never wish to break,” Mr. Ban told reporters in Dubai at the release of the High-Level Panel report on Humanitarian Financing, entitled “Too important to fail – addressing the humanitarian financing gap.”
“We are seeing all-time-high numbers for the amounts of money requested through humanitarian appeals, the amounts raised from generous donors, and scale of the global humanitarian funding gap,” he continued. “That is why, in May last year, I asked a high level panel of eminent independent experts to urgently seek solutions to the funding gap.”
Earlier today, the UN chief met with the panellists to discuss their recommendations to tackle the estimated $15 billion shortfall in funding. He underlined that since they began their work, the needs created by the demand for humanitarian aid have continued to rise dramatically.
“We are living in the age of the mega-crises,” he stated. “But, as this report clearly demonstrates, the gap in funding is a solvable problem.”
Noting that the report's title indicates that the global community “simply cannot fail,” the Secretary-General said the world needs “fresh thinking and the determination to take bold decisions.”
“I believe the panel has seized this opportunity and delivered,” he stated, thanking them for the important contribution to shaping the priorities for the World Humanitarian Summit, scheduled next May in Istanbul. “In a few weeks I will publish my report and vision for the future humanitarian agenda. I will build on the excellent report launched today to shape this important thinking.”
The report focuses on three areas to address the funding gap: shrinking the needs, growing the resource base for funding, and improving efficiency through a “Grand Bargain” between key humanitarian partners.
To reach their conclusions, the panel conducted hundreds of interviews with all parts of the humanitarian ecosystem, including meetings with affected people in ongoing crises.
“Our starting point was the stark facts and figures: 125 million people in need; a record $25 billion a year going to aid them; but, in spite of that, the needs continuing to outpace resources,” explained the report's co-chairs, Kristalina Georgieva, Vice- President of the European Commission, and Sultan Nazrin Shah of Malaysia, in a press release.
“A gap of $15 billion is a lot of money but in a world producing $78 trillion of GDP it should not be out of reach to find,” they added. “Closing the gap would mean nobody having to die or live without dignity for lack of money and a victory for humanity at a time when one is greatly needed.”
The co-chairs noted their ambition for this report is to carry it forward, so that by the time of the Summit in Istanbul “there will be significant engagement by the global humanitarian system for making the necessary changes which will ensure that the needs of vulnerable people can always be adequately met.”
Executive summary
The world today spends around US$ 25 billion to provide life-saving assistance to 125 million people devastated by wars and natural disasters. While this amount is twelve times greater than fifteen years ago, never before has generosity been so insufficient. Over the last years conflicts and natural disasters have led to fast-growing numbers of people in need and a funding gap for humanitarian action of an estimated US$ 15 billion. This is a lot of money, but not out of reach for a world producing US$ 78 trillion of annual GDP. Closing the humanitarian financing gap would mean no one having to die or live without dignity for the lack of money. It would be a victory for humanity at a time when it is much needed.
The UN Secretary-General has appointed a nineperson group of experts (“the panel”) to work on finding solutions about this widening financial gap. The panel identified and examined three important and interdependent aspects of the humanitarian financing challenge: reducing the needs, mobilising additional funds through either traditional or innovative mechanisms, and improving the efficiency of humanitarian assistance.
The panel’s work aims to help inform and shape the objectives of the World Humanitarian Summit (WHS) in Istanbul in May 2016. It is also highly relevant in the context of adopting the Sustainable Development Goals (SDGs) – only by focusing the world’s attention on the rapidly growing numbers of people in desperate need will we be able to achieve the SDGs.
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tralac’s Daily News selection
The selection: Friday, 15 January 2016
Two new, multi-year DFID-funded China-Africa trade research projects:
Chinese national oil companies and the economic development of African oil producers
Crucially it is a mistake to see this as one-way traffic with Chinese firms entirely determining the agenda. Past ESRC-funded research reveals the importance of African agency in shaping the terms of this engagement and with it the potentials for development. In terms of DFID-ESRC's priorities the project addresses Chinese FDI, resource-based growth models, and infrastructure given that many Chinese oil deals are tied to infrastructure. This project will be the first to assess whether and how such developmental benefits may be occurring. It will start by investigating the Chinese NOCs and their relationships to key state and semi-private agencies in China, before undertaking field research in Africa.
Important here are the complex 'packages' of aid, trade and investment in Africa through Chinese NOCs, banks and ministries. Chinese NOCs are active across Africa but three countries - Ghana, Angola and Sudan - represent different aspects of their engagement with the continent. These countries are also unique so these contextual differences allow the team to examine the role that African agency plays in shaping the nature of and benefits from this new investment in their oil sectors. They will also assess their impacts and the extent to which the growth they generate - directly, through oil-backed infrastructure, and via state revenue - trickles down to Africa's poorest.
This project aims to address two key development challenges and opportunities concerning Africa's natural resource governance today: the growing informal commodity trade and engagement with China. It focuses on the impacts of Chinese actors in informal agriculture, mining and timber trade along two fast-developing trade corridors connected to the Indian Ocean. The first corridor is a transit route for commodities such as timber and minerals from the Democratic Republic of Congo (DRC) through East Africa for export from Kenya. The second corridor links central southern Africa (Zambia and DRC's Katanga province to Beira port in Mozambique, from where agricultural products, timber and, increasingly minerals are exported). Specifically, the research involves four work streams over the course of 36 months:
Debnath Shaw: 'Why Africa?' (IDSA)
While Indian policy makers are fairly clear about what the country expects from the continent – the need to project and retain India's traditional political ties and influence in the region, protection of its core interests including that of the 2.7 million diaspora, and access to Africa's natural resources and markets – it is not clear if they have an understanding of what Africa expects from India. It is also important to continue to project to Africa that it is a priority in India’s foreign policy. Perhaps, it is time to set India’s Africa policy in stone, in the form of a white paper on Africa. [The author is a former Indian Ambassador to Tanzania, IAFS2015 consultant]
Accelerating Trade in West Africa: Stage 1 report (SAANA)
As is evident from the ToC presented above, some interventions that ATWA will be designing will be corridor or country specific: the development of JBPs, the professionalization of the transport industry, or the strengthening of single windows for example. These activities have to be undertaken “somewhere”. Others are not necessarily dependent on a specified geographical area: the development of a transport observatory, work on the ECOWAS CET or support to regional CSOs and PSOs can be undertaken at the regional level, without a national base. This report therefore has two main objectives:
Extract: The West Africa region is in great need for timely and reliable information on trade flows, transport infrastructure, corridor performance and trends. The information presented in this Stage 1 main report may give the impression that there is extensive data on the performance and features of key corridors. However, it took the ATWA project team however several months to gather and compare this information from various sources, and some of it is several years old. Most corridor data has been collected by one-off studies by different organizations for different purposes, at different times, making the data difficult to compare, and often difficult to interpret, confusing and contradictory. [Project www]
West Africa: Cross-border co-operation - mapping policy networks (SWAC)
The SWAC Secretariat's 2015-16 strategic reflection cycle is analysing major challenges and opportunities of cross-border co-operation. A mapping study is currently being conducted on the socio-economic potential of cross-border areas in West Africa using nine indicators (population potential, accessibility, border markets, status, resources, institutions, languages, human development and poverty).
The Migration, Mobility and Development in Africa (MIGDEVRI) project [Stakeholders advocate flexible migration laws(The Nation)]
West Africa declared free of Ebola transmission (UN News Centre)
United Nations Office for West Africa: report of the Secretary-General
Yesterday's UNSC's West Africa briefing
Mass exodus to SA hits Zim as economy falters (Zimbabwe Independent)
The deepening economic crisis has resulted in a renewed exodus of Zimbabweans seeking greener pastures with most heading to neighbouring South Africa, the Zimbabwe Independent has learnt. Statistics made available by the South African embassy shows that work permit and study visa applications processed by the embassy in 2015 have doubled to 300 per day from about 150 per day in 2014. South African Ambassador to Zimbabwe Vusi Mavimbela told the Independent in an interview this week that the embassy is overwhelmed with the increased study and work permit applications.
South Africa's trade conditions approach desperate levels: survey (Shanghai Daily)
SADC Double Troika meets on Monday in Botswana (TimesLive)
Tensions rise in Lesotho ahead of Phumaphi report (Mmegi)
Zimbabwe: Government to upgrade border security (The Herald)
North Africa: greening the economy to speed up industrialization (UNECA)
This meeting (Rabat, 1-4 March) will build on a number of ECA studies on topics such as achieving sustained industrialization in Africa (2012 ICE meeting), optimizing the use of basic commodities and other natural resources (2013 ICE meeting), selecting policy and institutional frameworks (2014 ICE meeting) and speeding up industrialization processes through trade (2015 ICE meeting). In preparation for COP 22, scheduled to take place in Marrakech (Morocco) in November 2016, participants will also discuss the sub-region’s essential need to preserve its environment while industrializing.
15th Border Regions in Transition conference: Cities, States and Borders - from the local to the global
The conference (17-20 May) will serve as a global forum for border scholars engaged in research dealing with cities, state and borders, irrespective of their disciplinary backgrounds, methodological approaches, or geographical scope. BRIT 2016 is open to contributions from all over the world, and not exclusively to those dedicated to Western European or North American borders which historically have been strongly represented in border studies.
Public debt vulnerabilities in low-income countries: the evolving landscape (IMF)
While the share of low-income countries at high risk fell by almost half between 2007 and 2013, debt vulnerability has actually increased in the past two years. According to the report, which looks at 74 low-income countries, public debt trends have changed significantly over the past decade. Debt relief programs, strong growth, and high demand for commodities, drove the average debt-to-GDP ratio down from 66% in 2006 to around 48 at end-2014.
Economic and Social Survey of Asia and the Pacific 2015: year-end update (UN News Centre)
Against the backdrop of a global economic slowdown, reinvigorating domestic and intra-regional demand plays a crucial role in reviving economies in Asia and the Pacific, according to a newly released-United Nations report, which also recommends a proactive fiscal policy emphasising productivity and addressing inequalities in the region. Developing economies of the Asia-Pacific region grew by an estimated 4.5% in 2015, the lowest rate since 2010, with only a modest rebound to 5% growth projected for 2016, according to the report. [Download]
How African tech start-ups received $185.7m investment in 2015 (Ventures Africa)
Nigeria 2016 Budget: available online here
Counting inconsistent policy costs on Nigeria Customs’ revenue drive (National Mirror)
Should we continue to use the term “developing world”? (World Bank Blogs)
Various downloads on 'Smart cities and infrastructure and foresight for digital development' (UNCTAD)
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Public debt in low-income countries: Opportunities and vulnerabilities
More diverse financing sources can raise new opportunities but can also pose risks, said a joint IMF-World Bank report on public debt vulnerabilities in low-income countries.
While the share of low-income countries at high risk fell by almost half between 2007 and 2013, debt vulnerability has actually increased in the past two years (see Chart 1).
According to the report, which looks at 74 low-income countries, public debt trends have changed significantly over the past decade. Debt relief programs, strong growth, and high demand for commodities, drove the average debt-to-GDP ratio down from 66 percent in 2006 to around 48 percent at end-2014 (see Chart 2).
The changing financing landscape, pros and cons
Good macroeconomic performance in many low-income countries – especially frontier-market economies – helped expand their financing sources through increased access to external markets. The study shows the share of non-concessional to total external debt broadly doubled between 2007 and 2014 for frontier-market economies and commodity exporters (see Chart 3).
Moreover, of the 74 countries covered by this report, 13 issued Eurobonds during 2010-14, with each market issue providing average financing equivalent to 3.2 percent of GDP (see Chart 4). And analysis suggests that low-income countries’ bond issuances have been mainly driven by greater economic development, although ample global liquidity has also helped.
The study also shows that issuance of Eurobonds is generally not associated with a near term loosening of fiscal policy. Thus, issuers substitute bond proceeds for other forms of financing, rather than increase expenditure in the short run. At the same time, access to international capital markets appears to reduce financing constraints, providing countries with more flexibility to conduct discretionary fiscal policy.
Borrowing from domestic markets is also on the rise, most importantly in frontier markets. For these countries, domestic public debt increased from 14 to 19 percent of GDP from 2007 to 2014, compared to a stable ratio of 13 percent of GDP for the average low-income country. Non-resident investors are showing increased interest in domestic debt markets in some frontier markets.
The report says domestic borrowing avoids currency risk, and is typically more predictable than overseas borrowing. For many countries, it appears to be associated with financial deepening and economic development. However, the report also says domestic borrowing generally carries a higher interest rate than bilateral official financing or international market borrowing, and that excessive domestic borrowing can crowd out private credit and investment.
Although this shift broadens borrowing options and appears to be part of a natural progression to more market-based borrowing, it elevates the risk of refinancing debt, and currency risk in the case of Eurobonds. In this regard, the report sends a cautionary message particularly in the context of shifting global conditions. “To minimize vulnerabilities associated with enhanced market access, sustainable fiscal and debt policies will be important, together with strengthened debt management,” the study says.
Official financing sources also changing
A decline in official bilateral lending from the 20 advanced economies that make up the informal group of creditors known as the Paris Club, has been broadly offset by a rise in loans from large emerging markets – notably China. The report says debt to non-Paris Club creditors has risen from about 8 percent of GDP in 2007 to almost 12 percent of GDP in 2014 (see Chart 5). Non-Paris Club creditors financing helped support low-income countries’ investment spending without having to resort to higher levels of potentially less concessional domestic or other market borrowing at a time when traditional sources of donor support have stagnated.
Look ahead and prepare
How countries respond to shifts in the global environment will determine whether their public debt vulnerabilities will remain manageable, the report said. “Looking forward, strengthened policy frameworks and careful debt management will be critical for all low-income countries. The weaker growth outlook in key advanced and emerging market economies is likely to impact low-income countries through lower demand for traded goods, with commodity exporters particularly affected. Prospects for tighter global liquidity conditions could raise the cost of borrowing and especially impact frontier markets with increased reliance on market-based financing, both domestic and external,” the study said.
Small states face the most challenging debt conditions, according to the report, and will need to strengthen their fiscal frameworks to help increase their resilience to shocks, boost potential growth, and reduce their debt.
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How African tech start-ups received $185.7 million investment in 2015
Africa’s foremost start up portal, Disrupt Africa, on Tuesday, released a report, which revealed that African technology startups received direct investments to the tune of about US$185,785,500.
According to the report, Nigeria, South Africa, Kenya, Tanzania, Egypt and Ghana held outstanding records for tech startup funding, which indicate a progressive trend for tech startups on the continent. Both the solar and financial technology sectors each constituted 32.9 percent of total funds raised.
Of all the countries featured on the report, 36 percent of the startups that raised funding are based in South Africa, 24 percent are based in Nigeria and 14.4 per cent of the startups are based in Kenya. In general, South African startups raised US$54,568,000 throughout the year; Nigerian startups received over US$49,404,000; and Kenyan startups received over US$47,365,000. Although this is the first time Disrupt Africa is conducting this kind of research, the investment figures are pretty outstanding.
The co-Founder, of Disrupt Africa, Gabriella Mulligan expressed enthusiasm over the potential of tech startups in Africa, which show a rising trend in attracting investments.
“2015 was an exciting year for African tech startups. Our data shows the increasing vibrancy of our ecosystem, with more quality tech startups, and more investor activity than ever before. We are very pleased to make our data available in the Disrupt Africa African Tech Startups Funding Report 2015, and trust it will contribute to understanding and growing the ecosystem,” she said.
Ventures Africa spoke with Disrupt Africa’s co-Founder, Tom Jackson to address the issue of accessible funding for tech startups in this part of the world. He believes there are a few challenges in getting adequate funding for tech startups here.
“It is still tough to get funding if you are an African tech startup, but it is getting easier. International investors have traditionally been wary, either through ignorance or the perception Africa is a risky place to invest. Local investors have preferred real estate. But there is a trend towards investors realizing the opportunities in African tech, and backing startups in the sector, this will continue into 2016,” he said.
Due to little information, Jackson made his own deductions on funding figures from 2014.
“I actually think the 2014 total figure will be higher than 2015, but only because Takealot, Jumia and Konga raised huge rounds in 2014 and didn’t need to raise in 2015. More startups outside of South Africa, Kenya and Nigeria have raised than ever before. This trend will continue,” Jackson said.