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New report identifies innovative ways to mobilize investment in low-emission, climate-resilient urban infrastructure
Mechanisms to boost large-scale capital for climate action in cities set out in study by Alliance initiated by UN Secretary-General
Proven innovative policies and mechanisms are unlocking investment for much-needed climate-smart infrastructure in cities, according to a new report, and need to be scaled up globally. The State of City Climate Finance report is being launched today by UN Secretary-General Ban Ki-moon and international partners at the Climate Summit for Local Leaders at Paris City Hall, taking place on the margins of the UN Climate Conference in Paris.
The report is the first issued by the Cities Climate Finance Leadership Alliance (CCFLA), a coalition of over 40 banks, national governments and civil society organizations launched by the UN Secretary-General at the Climate Summit he convened in September 2014. The aim of the Alliance is to accelerate investment in low-emission, climate resilient infrastructure in cities, and to close the investment gap in urban areas over the next fifteen years. Alliance members are working on a plan to help translate the report recommendations into action.
“Major investment is urgently needed for climate action in cities,” said the UN Secretary-General, “and the recommendations in this report, if put into place, can help unlock the capital needed. We know these solutions can work – they just need to be scaled up. I urge governments, banks and the international community to act on these practical recommendations.”
Five transformative recommendations
The State of City Climate Finance report recommends five innovative routes for mobilizing investment in low-emission, climate-resilient urban infrastructure:
1. Urge national governments to adopt policies and incentives that encourage cities to invest in low-emission and climate-resilient infrastructure.
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In Brazil, a fiscal transfer mechanism known as ICMS-Ecológico allows participating states to transfer part of their sales tax revenues to cities based on the creation of protected conservation areas. In Paraná state, some US$200 million was redistributed under the scheme from 1992- 2001, and protected areas grew by more than 165 per cent.
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Rwanda’s Environment and Climate Change Fund (FONERWA), which finances projects that promote climate resilience and green growth, targets 10 per cent of its funding to go to districts and cities. The government has committed $4.2 million, and mobilized $80 million from external sources.
2. Support cities in adopting frameworks that put a price on climate externalities, such as cap-and-trade
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Washington, DC launched a credit-trading facility in 2014 by which participants receive stormwater retention credits for exceeding regulatory requirements or making voluntary investments in green roofs, rain gardens or other infrastructure projects that reduce stormwater runoff, making the city more resilient to climate change.
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As of September 2015, 23 cities, states, and provinces have employed carbon-pricing instruments, mostly in the form of carbon taxes or emissions-trading systems, depending on local contexts. By the fourth year of Tokyo’s successful cap-and-trade programme, emissions have been reduced by 23 per cent.
3. Strengthen facilities that can support cities in developing investment-worthy climate action projects.
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The Cities Development Initiative for Asia (CDIA), led by the Asian Development Bank with a number of donors, has completed pre-feasibility studies for 85 infrastructure investment projects for medium-sized cities in developing Asia, of which 49 projects have attracted $5.9 billion in financing.
4. Direct international development finance through local financial institutions, which are well positioned to help cities finance climate-smart infrastructure solutions.
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Mexico’s EcoCasa programme has channeled more than $50 million in sub-commercial loans from the Clean Technology Fund, Inter-American Development Bank and Germany’s KfW Development Bank through a federal mortgage society, which in turn, has issued concessionary loans to local housing developers to use energy efficient and renewable technologies. Its local presence makes it well suited to identifying eligible local builders, offering credit and mortgages to local borrowers and managing risks. Since 2013, EcoCasa is already half way to its goal of financing 27,600 sustainable homes by 2019, which would prevent a total of 1 million tonnes of C02 emissions.
5. Create a network of labs to innovate new financial instruments and funding models.
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A number of effective labs exist for this purpose, including Climate-KIC’s new Low Carbon City Lab. The Global Innovation Lab for Climate Finance, established by a group of climate-finance donor countries, has piloted several initiatives that have attracted more than $170 million in funding. Expanded or additional labs are needed to scale up funding. Labs could also serve to establish standards and lend credibility to help the green bond market grow, as the Climate Bonds Initiative, World Bank and others have been doing.
Climate action in cities crucial, finance needed
Climate action in cities is crucial to addressing the global climate threat. Urban areas account for over 70% of energy-related CO2 emissions, and the world’s cities produce almost half (37-49%) of all global greenhouse gas emissions, according to the Intergovernmental Panel on Climate Change. Cities are also on the front lines of climate impacts and urgently need to build resilience. More than 80% of the overall annual global costs of adaption to climate change are estimated to be borne by urban areas, according to the World Bank.
Roughly $4.1-4.3 trillion will already need to be spent on urban infrastructure annually over the next 15 years, just to keep up with projected growth in a business-as-usual scenario, according to analysis done for this report. It will only cost an estimated $0.4-$1.1 trillion more in upfront investment to make this urban infrastructure low-emission and climate-resilient, which will pay dividends in decreased air pollution and increased efficiency and quality of life. The scale of urban investment needed is a critical opportunity to create better growth for cities.
The report analyzes the obstacles that many cities face in obtaining the financing they need, including uncertainty over regulatory and tax policies, lack of expertise in project development, lack of control over infrastructure planning, high transaction costs and lack of proven funding models at the city and regional level. Cities in developing countries in particular have difficulty obtaining commercial financing: of the 500 largest cities in emerging economies, only 4 per cent are deemed creditworthy in international markets, according to the World Bank.
The McKinsey Center for Business and Environment provided research and analysis to inform the report. Financial support for the report was provided by the Children’s Investment Fund Foundation (CIFF) and Agence Française de Développement (AFD).
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China, Africa map out strategic vision for win-win cooperation with practical action plan
Chinese President Xi Jinping and African leaders rounded off a landmark summit in Johannesburg on Saturday with a unanimous consensus to upgrade China-Africa relations backed by a roadmap for further boosting mutually beneficial cooperation and common development.
The leaders’ meeting, officials and observers from across the region say, has not only ushered the world’s second-largest country and “most promising continent” into a new era of common development, but once again testified to China’s brotherly friendship and genuine partnership with Africa.
One upgrade, five pillars, ten plans
In his concluding remarks at the summit, the second of the 15-year-old Forum on China-Africa Cooperation (FOCAC), Xi announced that he and the dozens of participating African leaders reached a unanimous agreement to lift the China-Africa relationship to a comprehensive strategic cooperative partnership.
The upgrade, proposed by Xi on Friday in a keynote speech at the opening ceremony, came nine years after China and African countries decided at the first FOCAC summit in Beijing to establish a new type of China-Africa strategic partnership featuring political equality and mutual trust, economic win-win cooperation and cultural exchange.
In support of the historic progress, African leaders endorsed Xi’s appeal to strengthen the five “major pillars” of political equality and mutual trust, win-win economic cooperation, mutually enriching cultural exchanges, mutual assistance in security, and solidarity and coordination in international affairs.
To realize the upgrade, the two sides also agreed to carry out 10 major cooperation plans in the next three years in the areas of industrialization, agricultural modernization, infrastructure construction, financial services, green development, trade and investment facilitation, poverty reduction and public welfare, public health, people-to-people exchanges, and peace and security.
The programs, he pointed out when proposing them on Friday, will focus on helping African countries break the three development bottlenecks of backward infrastructure, talent shortage and inadequate fund, accelerate industrialization and agricultural modernization, and realize independent and sustainable development.
As regards the lack of skilled personnel, Xi announced that China will establish a number of regional vocational education centers and several capacity-building colleges for Africa, train 200,000 technicians for African countries, and provide the continent with 40,000 training opportunities in China.
Meanwhile, China will offer African students 2,000 education opportunities with degrees or diplomas and 30,000 government scholarships, he said, adding that each year his country will also invite 200 African scholars to visit China and 500 African youths to study in China each year and train 1,000 media professionals from Africa.
Among many other measures, China will also cancel outstanding debts in the form of bilateral governmental zero-interest loans borrowed by the relevant least developed African countries that mature at the end of 2015, and launch 200 “Happy Life” projects and special programs focusing on women and children, according to the president.
The 10 plans “identified areas where Africa is interested in and which are in our Agenda 2063,” commented Nkosazana Dlamini-Zuma, chairwoman of the African Union (AU) Commission, which is a FOCAC member along with China and 50 African countries that have established diplomatic ties with China.
“Those are areas we are going to cooperate on and take this relationship to new heights,” she told Xinhua in an interview on Saturday, adding that the cooperation with China will enable Africa to build the three networks of highways, railways and aviation.
Zimbabwean Minister of Industry and Commerce Mike C. Bimha, to whose country Xi paid a state visit before traveling to South Africa, said to Xinhua that the package “is the best a head of state can propose and the best to have come up from FOCAC.”
Good friends, good partners, good brothers
Themed “Africa-China Progressing Together: Win-Win Cooperation for Common Development,” the summit adopted a Declaration and a 2016-2018 Action Plan at a plenary session before South African President Jacob Zuma, who co-chaired the summit with Xi, declared the closing of the two-day gathering.
While charting the course for China-Africa win-win cooperation, the leaders’ meeting, which Xi described as “a historic conference” and “a complete success,” has also been widely lauded as yet another embodiment of the Asian nation’s brotherly friendship with its African partners and commitment to common development.
“In conducting China’s relations with Africa, we adhere to the principles of sincerity, practical results, affinity and good faith and uphold the values of friendship, justice and shared interests,” Xi reaffirmed Friday in his keynote speech, which was punctuated by rounds of applause.
The principles are also enshrined in China’s second Africa policy paper, which was released during the summit. It states that China and Africa “have always belonged to a community of shared future” and “have always been good friends who stand together through thick and thin, good partners who share weal and woe, and good brothers who fully trust each other despite changes in the international landscape.”
In a telling sign of Beijing’s commitment to the principles, the Chinese president met with more than 40 African leaders either separately or in groups on the sidelines of the summit, comparing notes with them on the relations between China and their respective countries and other issues of common concern.
Meanwhile, in order to ensure smooth implementation of the 10 major cooperation plans, Xi announced that his country will proffer 60 billion U.S. dollars of funding support, which comprises 5 billion dollars of grant and interest-free loans, 35 billion dollars of preferential loans and export credit, 5 billion dollars of additional capital for the China-Africa Development Fund and the Special Loan for the Development of African SMEs each, and a China-Africa production capacity cooperation fund with the initial capital of 10 billion dollars.
Besides, Xi stressed at a business forum that his country “is ready to share, without any reservation, advanced applicable technology with Africa” and help strengthen “Africa’s internal drive for economic development,” and that China-Africa economic cooperation is open, including to companies from other countries on the basis of mutual benefit.
In a tender testimony to China’s all-round engagement with Africa, Chinese First Lady Peng Liyuan, who is the World Health Organization Goodwill Ambassador for Tuberculosis and HIV/AIDS, attended an anti-AIDS advocacy activity on Saturday and reiterated China’s pledge to support Africa’s medical and health programs.
The series of statements and measures are “very encouraging” and indicate that China is very genuine and very serious about its relations with Africa, said Bimha, the Zimbabwean minister, adding that they also show that “China wants to be a true friend of Africa.”
In the eyes of Tlohang Sekhamane, foreign minister of Lesotho, “it is clear that China wants to be a partner looking for cooperation with Africa and it seeks opportunities of real win-win cooperation instead of looking for a situation of dominance.”
Colonization accusations “a complete misconception”
While welcoming China’s steadfast commitment to and fresh measures on advancing its interaction with their continent, African leaders and observers have also joined the chorus of voices against the claim that China is colonizing Africa.
Xi struck a chord with many African leaders, including Dlamini-Zuma, when he said in Friday’s keynote speech that “China strongly believes that Africa belongs to the African people and that African affairs should be decided by the African people.”
Africa should be given space to chart its own destiny, echoed the AU Commission chairwoman. “Africa belongs to Africans and we must be allowed to chart our own development path.”
Adji Ayassor, minister of state in the Togolese Ministry of Economy, Finance and Development Planning, told Xinhua on Friday that the Chinese president’s keynote speech told “the truth about the cooperation between China and Africa.”
Contrary to what some claim in the West, China “is not colonizing Africa,” he said. “We believe that is the best way to develop Africa... It (China) is taking a real path of Africa’s development. It is a real cooperation.”
Ayassor’s remarks were in line with what Zimbabwean President Robert Mugabe, who also holds the rotating AU chair, said in his speech at the opening ceremony. While thanking China for its unconditional support for Africa, he slammed actions by the West that have derailed progress in the world’s second largest continent.
“China has never been our colonizer, and while some detractors allege that our cooperation with Beijing is commercially driven, the reality on the ground does not conform to such a distorted view,” Mugabe remarked.
Kenyan President Uhuru Kenyatta, who was in Johannesburg for the summit, also lashed out at the various insinuations that China’s intentions in Africa could be similar to those of the colonialists, telling reporters Saturday that “the perception that China is the new colonizer is a complete misrepresentation of Beijing’s activities here in Africa.”
“Achievement of mutual benefits is the basis of Sino-Africa cooperation,” Kenyatta pointed out. “I don’t think that a partner who is helping us fight poverty and other development challenges can be called a colonizer.”
What China is doing in Africa is what the colonialists failed to do in the past, namely help Africa out of poverty, he stressed. “China is ready to help us develop and meet our socioeconomic objectives without imposing its agenda on us. This is the outstanding aspect of our cooperation with China.”
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Declaration and Action Plan of the Johannesburg Summit of the Forum on China-Africa Cooperation
Johannesburg Declaration (Combined Version of Africa and China)
- We, the Heads of State, Government and Delegations of the People’s Republic of China and 50 African countries (listed in the schedule annexed hereto), and the Chairperson of the African Union Commission, convened in Johannesburg, South Africa on the 4th and 5th of December 2015 for the Summit of the Forum on China-Africa Cooperation (FOCAC) under the theme “China-Africa Progressing Together: Win-Win Cooperation for Common Development”, to consolidate solidarity and cooperation among the peoples of China and Africa.
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Coming together as Africa, with a population of 1.1 billion people, and China, with 1.3 billion people, we are committed to ushering in a new blueprint to realize opportunities for future mutual development, and to contribute to promoting world peace, stability and the development of Africa and China.
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Both African countries and China are developing countries facing common challenges of development and sharing broad common interests in a world that is undergoing and will continue to undergo profound and complex changes.
Therefore, it is incumbent on us to continue to strengthen the current platform for collective dialogue, consolidate Africa-China traditional friendship, deepen strategic collaboration and enhance the mechanism of practical cooperation between China and Africa.
Both sides agree to upgrade the new type of strategic partnership to comprehensive strategic and cooperative partnership and promote a comprehensive upgrading of the China-Africa friendly and mutually beneficial cooperation.
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We are pleased to observe that FOCAC has achieved mutually beneficial results during the past 15 years since its establishment. We highly commend the major follow-up actions initiated and implemented by the Beijing Summit and the Ministerial Conferences of FOCAC in this regard.
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China-Africa cooperation has been constantly enriched, covering broader areas with more diversified participants and FOCAC has become a resounding brand for China-Africa solidarity and cooperation, and a model for leading international cooperation in Africa. In this regard, we further welcome with appreciation the efforts that FOCAC has made to deepen structured ties with regional bodies such as the African Union and its structures, Regional Economic Communities and the African Development Bank.
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We believe that China-Africa relations promote the common interests of both our peoples and continue the trend of prosperous growth evident over the last 15 years.
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With the United Nations (UN) marking its 70th anniversary, we believe that to safeguard the results of the world victory in the World War II , international equity and justice is vital to maintaining world peace, stability and prosperity. We express our commitment to resolutely reject any attempts to misrepresent the results of World War II. While remembering the scourge of wars, we highlight that it is our common duty to build a future of peace and development.
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We believe that, with the development of a world characterised by inter-dependence and connectivity under globalisation, and diversification at various levels, the interests of countries have become inextricably linked, with a growing sense of common destiny.
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We underscore upholding the purposes and principles of the Charter of the UN, as well as its authority as the leading institution in international affairs.
We are committed to strengthening cooperation, coordination and support between the two sides in international organizations and multilateral mechanisms on regional and international issues of common interest, jointly advancing democracy and the rule of law in international relations, advocating for an equitable and just international order, in order to build a harmonious world of durable peace and common prosperity.
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We believe that in the midst of complex and profound global changes, we need to be done to ensure an international system of governance that is just, equitable, representative and better suited to the political realities of the world in order to maintain peace, stability and prosperity.
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Therefore, we are committed to the principles of multilateralism, while opposing interference in the internal affairs of countries and the use or threat of force in international affairs.
In this regard, we stand for the establishment of a just international order with win-win cooperation at its core to promote a more equitable, fair and reasonable development and to safeguard and enhance the legitimate rights and interests of the developing countries.
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We stand for upholding the UN’s core position and role in international affairs, and reaffirm the need for reform of the UN. In this regard, we reaffirm that the historical injustices endured by African countries should be undone, and priority should be given to increasing the representation of African countries in the UN Security Council (UNSC) and other agencies.
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We furthermore underscore the significance of Africa as an important, strong, resilient and influential global player and partner, though being an active and equal participant in global affairs. In this regard, we recognise the critical role of the African Union in conflict resolution, prevention and management and commend the efforts of African countries, the African Union and Regional Economic Communities to independently resolve regional conflicts and maintain regional peace and stability. We emphasize the significance of cooperation between the UN and the AU in accordance with Chapter 8 of the UN Charter and particularly UNSC Resolutions 1809 and 2033. We reiterate that crises and disputes must be resolved peacefully though political means and advocate the doctrine of common, comprehensive, cooperative and sustainable security.
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We welcome the adoption of the 2030 Agenda for Sustainable Development as a universal, transformative and integrated development plan. It remains important for the developed countries to honour compliments made in respect of the 2030 Agenda, in particular those relating to Goal 17, as well as continuing to meet their current commitments to ensure the full implementation of the Agenda.
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In this regard, we also call on the international community to pay greater attention to the issues of development, show political sincerity and give priority to supporting the resolution of difficulties and challenges faced by developing countries, especially the least developed countries in Africa to independently achieve sustainable development. We urge developed countries to honour their commitments to provide aid to developing countries, African countries in particular, as we believe that the North-South imbalance in development is an important factor hindering the strong recovery and sustained growth of the world economy.
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We support strengthened South-South cooperation and are convinced that China-Africa cooperation is a model manifestation of this. In this regard, China is committed to supporting Africa’s efforts to implement Agenda 2063, its First 10-Year Implementation Plan and NEPAD and believes that they are essential to Africa’s pursuit of peace, stability, integration, growth and development.
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We oppose trade protectionism in all its forms and are in favour of advancing the World Trade Organization (WTO) Doha Development Round negotiations and safeguarding and developing an open world economy. We further welcome the first hosting of the 10th WTO Ministerial Conference in Africa, taking place from 15 to 18 December 2015 in Nairobi, Kenya, and stress the importance of a successful meeting in Nairobi that brings tangible results and meaningful outcomes on the developmental agenda for Developing and Least Developed Countries.
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We stand for necessary reform of the existing international financial system, and the establishment of a fair, just, inclusive and orderly international financial system. Efforts should be made to truly increase the voice and representation of developing countries particularly China and African countries in the international financial institutions and the international monetary system, and strengthen the mandate of the international financial institutions in development and poverty eradication, in an effort to narrow the North-South gap. In this regard, we welcome the establishment of the BRICS New Development Bank, with its headquarters in Shanghai and the African Regional Centre in South Africa, with a focus on supporting development in Africa, in particular on infrastructure and sustainable development projects.
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We will, in keeping with the principles of equity and “common but differentiated responsibilities and respective capabilities”, support the 21st Conference of Parties to the United Nations Framework Convention on Climate Change to adopt a protocol, another legal instrument or an agreed outcome with legal force under the Convention, which provides an effective solution to the global response to climate change with means of implementation required by developing countries. We further affirm the importance of addressing mitigation and adaptation in a balanced manner. Adaptation is equally a global responsibility. We further affirm that fulfilling the ultimate objective of the Convention will require strengthening the multilateral, rules-based regime and the urgent and sustained implementation of existing commitments under the Convention, including the entry into force of the Doha Amendment on the 2nd Commitment Period of the Kyoto Protocol. We acknowledge that climate change is exacerbating existing challenges in Africa and is placing additional burdens on national budgets and efforts of African States to achieve sustainable development. In this regard, the African side recognizes China’s initiative in capitalising the China South-South Cooperation Fund to support African Countries combat climate change, drought and desertification.
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We are committed to the path of peaceful development and its contribution to world peace, stability and economic growth, and are of the view that China’s economic restructuring and progress will help Africa advance its own industrialization and modernization processes.
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The African side acknowledges and appreciates the leading efforts and contribution made by China as the first responder to deliver Ebola Virus Disease emergency support to the affected countries.
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We reaffirm our commitment to the One China policy. Both sides will continue to support each other’s efforts to safeguard national sovereignty, security and development interests and to promote the causes of national reunification and regional integration respectively.
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We support Africa’s effective endeavours to safeguard and maintain regional peace and stability, aimed at achieving higher economic growth rates and promoting integration and self-reliance. China believes that Africa is a significant force of politics, economy and culture in the world.
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We believe that China and Africa’s development strategies, are complementary and characterised by mutual benefit, equality, openness, inclusiveness, accountability, and that they demonstrate the possibilities and opportunities of solidarity, mutual support and respect among the developing countries. Therefore, both sides shall explore and fully utilize their comparative strengths to promote and further improve this mutually beneficial cooperation.
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We solemnly declare that, adhering to the principles of sincerity, practical results, affinity and good faith and the values of friendship, justice and shared interests, both China and Africa are committed to building and developing comprehensive strategic and cooperative partnership featuring political equality and mutual trust, economic cooperation for win-win results, exchanges and mutual learning between Chinese and African civilizations, mutual assistance in security affairs and solidarity and cooperation in international affairs. To this end, we will:
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Remain committed to treating each other as equals and enhancing solidarity and mutual trust. Increase, improve and strengthen dialogue and cooperation between the governments of the two sides at all levels; Respect each other’s core interests, accommodate each other’s legitimate concerns and aspirations, cement consensus on key strategies; Promote exchanges and cooperation in the judicial, law enforcement and legislative fields; Strengthen China’s cooperation with the African countries, the African Union and its structures, the Regional Economic Communities and the African Development Bank to advance the regional integration agenda, to safeguard peace and stability in Africa and to promote the socio-economic development of Africa.
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Adhere to the principle of upholding justice and promoting common interests and common development. Actively pursue cooperation between our industries and develop industrial capacity, and jointly promote the process of industrialization and agricultural modernization in Africa; Focus on strengthening cooperation in infrastructure projects including, but not limited to, railways, highways, regional aviation, power, water supply, information and communication, airport and posts, as well as human resource development cooperation and capacity building; Give priority to promoting mutually beneficial cooperation in agriculture and food security, processing and manufacturing, energy resources, maritime economy, tourism, investment, trade, finance, technology transfer and other fields. We underscore the importance of intensifying cooperation in projects related to beneficiation at source, while enhancing technical and intellectual capacities; Enhance collaboration in the development of industrial production capabilities and value addition by establishing industrial parks and clusters, technology parks, special economic zones (SEZs) and engineering centres providing training for engineering and technical personnel and managers; Actively explore the linkages between China’s initiatives of building the Silk Road Economic Belt and 21st Century Maritime Silk Road and Africa’s economic integration and sustainable development agenda, and seek more opportunities to promote common development and realize our common dreams.
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Promote mutual learning and seek harmonious progress through mutual efforts. Share experience for development, deepen cooperation in various fields such as development assistance, medical care and public health, education, poverty eradication, science and technology and knowledge sharing, and ecological and environmental protection; recognize the importance of developing technology and innovation in advancing the economic growth of African countries in areas such as the mining and extractive industry, pharmaceuticals, information technology, and chemicals and petrochemicals, both in the area of exploration and extraction of natural resources and in their processing; Strengthen people-to-people and cultural exchanges and cooperation between the two parties and, in particular, enhance exchanges in culture and art, education, sports, tourism, press and media, and between academia, think tanks, the youth, women, trade unions and persons with disabilities, with a view to deepening the understanding and friendship between the peoples of China and Africa.
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Continue to support each other on security matters and maintain peace and security. We remain committed to seeking the peaceful settlement of disputes through dialogue and consultation, and China supports Africa in its efforts to solve African problems through African solutions; Implement the “Initiative on China-Africa Cooperative Partnership for Peace and Security”, support the building of the collective security mechanism in Africa, and jointly manage non-traditional security issues and global challenges such as, but not limited to, food security, energy security, cyber security, climate change, biodiversity conservation, major communicable diseases and transnational crimes. We firmly condemn terrorism in all its forms and we commit to combining our efforts in a coordinated and more efficient way to fight against this scourge which constitutes a global threat for humanity and its values of peace and tolerance.
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Unswervingly coordinate and cooperate with each other and safeguard our common interests. In the United Nations, international financial institutions and other multilateral organizations, we will strengthen coordination and cooperation on regional and international issues of common interests, and firmly safeguard the common interests of China, Africa and other developing countries. African countries support China’s hosting of the G20 Summit in 2016 and laud China’s commitment to promote further cooperation between the G20 and African countries. In this regard, we appreciate and welcome the international community, especially developed countries, making active efforts and contributing to the peace, development and prosperity of Africa.
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We welcome the outcomes of the 2nd Ministerial Forum of China-Africa Health Development and the 5th China-Africa Business Forum held in South Africa at various times over the last three months.
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We commend the Ministers participating in the 6th Ministerial Conference of the Forum on China-Africa Cooperation for their dedicated efforts and outstanding work. In this regard, we have, in the spirit of this Declaration, adopted the Johannesburg Action Plan (2016-2018) of the Forum on China-Africa Cooperation. We commit ourselves to implementing the Johannesburg Action Plan and will work to ensure its successful implementation.
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We express our profound gratitude to H.E. President Jacob Gedleyihlekisa Zuma of the Republic of South Africa, and H.E. President Xi Jinping of the People’s Republic of China, for co-chairing the 2015 Johannesburg Summit of the Forum on China-Africa Cooperation (FOCAC).
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We further express our profound gratitude to the Government and the People of the Republic of South Africa for their kind hospitality and excellent facilities for the duration of the 2015 Johannesburg Summit of the Forum on China-Africa Cooperation.
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The 7th Ministerial Conference of FOCAC will be held in the People’s Republic of China in 2018.
Algeria, Botswana, Cameroon, Comoros, Cote d’Ivoire, Equatorial Guinea, Gabon, Guinea, Bissau, Liberia, Malawi, Mauritius, Namibia, Rwanda, Sierra Leone, South Sudan, Togo, Zambia, Angola, Burundi, Central African Republic, Congo, Djibouti, Eritrea, Ghana, Kenya, Libya, Mali, Morocco, Niger, Senegal, Somalia, Sudan, Tunisia, Zimbabwe, Benin, Cabo Verde, Chad, Democratic Republic of Congo, Egypt, Ethiopia, Guinea, Lesotho, Madagascar, Mauritania, Mozambique, Nigeria, Seychelles, South Africa, Tanzania, Uganda.
The Forum on China-Africa Cooperation Johannesburg Action Plan (2016-2018)
Preamble
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The Johannesburg Summit and the 6th Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC) were held in Johannesburg from 3 to 5 December 2015. Heads of State and Government, Heads of Delegation, the Chairperson of the African Union (AU) Commission and Ministers of Foreign Affairs and Ministers in charge of economic cooperation from China and 50 African countries (hereafter referred to as “the two sides”) attended the Summit and Ministerial Conference respectively.
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The two sides reviewed with satisfaction the development of relations between China and Africa and applauded the positive contribution FOCAC had made over the past 15 years since its inception in advancing the comprehensive and in-depth development of China-Africa relations, and agreed that FOCAC had become both a key platform for collective dialogue between China and African countries, and an effective mechanism for practical cooperation.
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The two sides share the view that, as China works for the Two Centenary Goals and as Africa implements Agenda 2063 and its First 10-Year Implementation Plan, the current development strategies of China and Africa are highly compatible. The two sides shall make full use of their comparative advantages to transform and upgrade mutually beneficial cooperation focusing on better quality and higher efficiency to ensure the common prosperity of our peoples.
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The two sides are satisfied with the effective implementation of the Forum on China-Africa Cooperation Beijing Action Plan (2013-2015) adopted at the 5th Ministerial Conference of FOCAC, and decide, in the spirit of the Johannesburg Declaration of the Summit of the Forum on China-Africa Cooperation, to jointly establish and develop comprehensive strategic and cooperation partnership between China and Africa featuring political equality and mutual trust, economic cooperation for win-win results, exchanges and mutual learning between Chinese and African civilizations, mutual assistance in security affairs, as well as solidarity and cooperation in international affairs.
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In order to implement the outcomes of the Summit and the Conference, and chart the course of China-Africa friendly and mutually beneficial cooperation in all fields in the next three years under the theme of “China-Africa Progressing Together: Win-Win Cooperation for Common Development”, the two sides jointly formulate and adopt with consensus this Action Plan.
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Africa Capacity Report 2015: Capacity Imperatives for Domestic Resource Mobilization in Africa
The Africa Capacity Report (ACR) 2015 sends a very clear message: with official development assistance to Africa diminishing, the continent will have to rely more on mobilizing domestic resources if it is to implement its development agenda.
The ACR 2015 shows that this is possible, with a good number of African countries providing practical success stories based on strategies and initiatives that can easily be adapted to other countries. However, the capacity gaps to generate savings and taxes from domestic resources and allocate them to economically and socially productive activities remain glaring.
Overview
Each year since 2011, the African Capacity Building Foundation (ACBF) has produced the Africa Capacity Report (ACR). The objectives of the ACR are to measure and examine capacity in relation to the development agenda in African countries by focusing on the key determinants and components of capacity for development. ACBF defines capacity as the individual, organizational, and societal ability to set goals for development and to achieve them.
As in previous ACRs, the first chapter is devoted primarily to Africa’s capacity development landscape. It focuses on the Africa Capacity Indicators and the Africa Capacity Index (ACI). The ACI is a composite index calculated from four clusters covering the policy environment, implementation processes, development results, and capacity development outcomes. Results for this year indicate a good policy environment and good implementation processes for most African countries, although countries are not doing as well on development results. Notably, capacity development outcomes have deteriorated and remain the most pressing issue. Performance on the thematic indices is generally encouraging and particularly strong on gender equality and social inclusion.
This year’s annual theme of key importance to Africa’s development agenda focuses on the capacity development challenges in domestic resource mobilization. ACR 2015 surveys the state of and trends in domestic resource mobilization and illicit financial flows across the continent, and it identifies capacity gaps and requirements for countries to mobilize more resources domestically and reduce illicit financial flows abroad.
A team of in-country data experts conducted a quantitative survey in 45 African countries through a questionnaire, complemented by a qualitative survey in 14 countries selected by the ACBF for case studies according to the following criteria: tax effort performance, size of the economy, linguistic line, and geographic coverage. Drawing on the findings of these country studies, ACR 2015 provides key capacity building messages and policy recommendations.
The capacity dimensions of domestic resource mobilization are crucial today if African countries want to meet the ambitious Sustainable Development Goals and the goals of Agenda 2063. The Report of the High-Level Panel of Eminent Persons on the Post-2015 Development Agenda made it clear that domestic resource mobilization is a necessity and that a new global partnership is needed to fight illicit financial flows. Concerns have already been raised that the Third International Conference on Financing for Development – held in Addis Ababa, Ethiopia, on July 13-16, 2015 – did not deliver much in additional financial resources for the Sustainable Development Goals, implying that most financing must come from domestic sources.
To the extent that aid and other flows from external sources will not be sufficient, domestic resource mobilization will be critical for achieving the Sustainable Development Goals and the African Union’s vision of “An integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena”.
ACR 2015 complements the ACBF’s capacity building initiatives on the continent. Since its inception, the ACBF has created think tanks and policy units to support the formulation and implementation of strategic national policies. The overall aim is to ensure economic prosperity, political stability, and social justice for all citizens, through efficient use of resources. The ACBF has also created training programs such as the Economic Policy Management Program to improve economic analysis, public administration, and research capabilities and to deepen the financial sector. In addition, the ACBF has worked with partners such the International Monetary Fund to support deepening of the banking and financial sector.
Highlights of the Africa Capacity Indicators 2015
Results are generally satisfactory. The ACI values range from 20.7 (Central African Republic; CAR) to 70.8 (Cabo Verde).
No countries are at the Very Low or Very High extremes of capacity. Eight countries are in the High bracket, and no countries are in the Very Low bracket. More effort will be required for countries to move into the Very High bracket (ACI values of 80 and above).
The bulk of countries have Medium capacity. Of the 45 countries surveyed, most (73.3 percent) fall within the Medium bracket, 17.8 percent are in the High bracket, and 8.9 percent are in the Low bracket.
Analysis by cluster indicates a pattern that has not changed significantly from year to year, an indication that countries are stagnating in those clusters. As in previous ACRs (2011-14), the policy environment cluster remains the strongest and capacity development outcomes, the weakest.
On the policy environment – underpinned by broad participation and good governance – most countries are ranked High or Very High. Even if excellent, these results are not as good as in 2014, when 91 percent of countries were in the Very High category. Processes for implementation are also impressive, with 87 percent of countries in the High or Very High brackets.
Only 6.7 percent of countries are ranked Very High on development results, while 13 percent are ranked Low or Very Low.
Capacity development outcomes are even worse: 91 percent of countries are in the Low or Very Low brackets.
Overall capacity scores improved from 49.9 in 2014 to 52.0 in 2015. Only 8.9 percent of countries are now in the Low bracket, down from 13.6 percent in 2014. Countries with High capacity have seen an improvement in the average of their scores, and a higher percentage of countries are now in the Medium capacity bracket.
Achievements on the four thematic indices (policy choices for capacity development, development cooperation effectiveness related to capacity development, gender equality and social inclusion, and partnering for capacity development) are encouraging overall. More than half the countries are in the High or Very High category on each of the four. The best performance by far is on the gender equality and social inclusion index, where all countries are at least in the Medium category.
More resources for capacity development initiatives are required so that countries can improve their capacity development outcomes, an area that remains very weak. The ACBF can thus make an important difference by funding and providing technical assistance for specific capacity building projects and programs to meet the needs of African member countries and nonstate actors.
Challenges in mobilizing domestic resources and curbing illicit financial flows
Discussions for the post-2015 agenda have set high expectations for domestic resource mobilization as a self-sustaining development finance strategy. A focus on domestic resource mobilization and illicit financial flows in the African context is required for several reasons. For a start, mobilizing domestic resources allows countries to reduce their dependency on foreign aid. Examples of successful cases of development in other low-income (developing) regions reveal that high domestic savings is necessary for high investment and growth. Further, an extensive literature documents the positive link between taxation and state building through creating a social contract between the state and citizens.
Domestic resource mobilization refers to generating savings and taxes from domestic resources – and allocating them to economically and socially productive activities – rather than using external sources of financing, such as foreign direct investment, loans, grants, or remittances. Even if domestic resource mobilization does not include remittances, the ACR 2015 focuses on them as well; empirical and anecdotal evidence shows they can have a strong impact once they reach receiving countries. Illicit financial flows – resource flows that are “illegally earned, transferred or used” – are also discussed because they are a huge loss of domestic resources for Africa. According to the most recent data (for 2012), such flows from Africa were higher than remittance inflows ($82.5 billion versus $51.4 billion – chapter 2), and several countries are now losing large amounts to those flows relative to the tax revenues they collect.
The state of domestic resource mobilization and illicit financial flows in Africa
When compared with other developing regions – East Asia and Pacific, Latin America and the Caribbean, and South Asia – Sub-Saharan Africa has the lowest savings rate. And it has been trending downward Similar trends can be observed for investment and per capita growth rates, which to a large extent explain the persistence of absolute poverty in Sub-Saharan Africa. When North African countries are included in the mix, only Algeria has a very high savings rate. Overall, Africa’s savings rate is lower than those of East Asia and Pacific and of South Asia.
The average tax-to-GDP ratio in Africa has crossed 20 percent of regional GDP in recent years, far higher than in South Asia but still lower than in Latin America and slightly lower than in East Asia. Tax revenues have surged in the last decade, from $123.1 billion in 2002 to $508.3 billion in 2013. But these numbers may not reflect the situation across the continent since the resource-rich countries skew the regional average and most African countries have tax-to-GDP ratios below the regional average.
The increase in tax revenues has been driven by resource rents and by direct and indirect taxes; in countries such as Chad, Equatorial Guinea, and Nigeria, resource rents dominate the tax mix. The increase in resource rents has caused a split between countries mobilizing high tax revenues thanks to natural resources and others making efforts but unable to mobilize revenues because of a shallow tax base. Results of a computed average tax effort index—the ratio of actual tax collection and taxable capacity – for 1996-2013 confirm this: 27 of 47 countries have low tax effort indices, and several of them are resource rich. Even if they had increased their tax revenues from direct and indirect taxes, it is quite possible that the availability of resource rents would still have distorted the incentive for more efforts. Further, the tax composition (in percentage terms) has continuously shifted from trade taxes because of trade liberalization. Tax performance metrics (such as the ratio of the budget of the tax authority and revenue collected by the authority) indicate that Africa has a very expensive and inefficient tax collection system.
Overall, several African countries have room for improvement – whether in savings and investment rates, tax-to-GDP ratios, the tax mix, tax effort, the disincentive effects of revenue from natural resources, tax performance indicators, or the nature and reach of financial systems. Too few countries are paying attention to the expenditure side – to whether taxation is leading to efficient service delivery. A credible fiscal pact between citizens and the state can work only if citizens can see their tax dollars being used effectively.
Remittances to Africa amounted to $64 billion in 2014, or 14.8 percent of global inflows to developing countries (according to World Bank data). These are low set against other regions such as East Asia and Pacific ($122 billion or 28.3 percent of global inflows) and South Asia ($116 billion or 26.9 percent). Remittance inflows to Africa are now higher than official development assistance flows, even if not much higher than in other regions. However, more work needs to be done to ensure that remittances are not simply used for consumption; they should constitute investable resources with the potential to serve longer-term development needs. Equally important is to ensure a competitive market for remittance flows to reduce the high transaction costs of money transfers.
But the most important challenge for most African countries is to curb illicit financial flows. Such flows stem from factors such as weak institutions and governance, lack of regulation and information, and external borrowing. The African continent lost $60.3 billion to illicit financial flows on average over 2003-12 (calculated from Kar and Spanjers 2014), whereas average official development assistance for the period was $56 billion (OECD-DAC International Development Statistics online databases).
Strategies and initiatives for domestic resource mobilization
All 14 countries in the cases examined by the ACBF have, in one way or another, implemented policies to mobilize more resources domestically, especially since the Monterrey Consensus in 2002. Many countries have put in place initiatives to optimize tax revenues and reduce inefficiencies such as tax exemptions. To deal with illicit financial flows, measures have been introduced, for example, to prohibit the use of transfer pricing to evade taxes and to train staff to conduct forensic audits. Several African governments have liberalized their financial sectors and focused on product innovation and financial inclusion.
Some examples of strategies and initiatives for domestic resource mobilization include integrating revenue collection agencies in one coherent institution; introducing a value-added tax (as in Ghana and Togo); optimizing revenue collection from the mining sector; introducing presumptive taxes on informal activities by using indirect methods (as in Zambia); introducing a housing savings scheme and issuing diaspora bonds (as Ethiopia); and adopting mobile banking (as with M-PESA in Kenya).
Challenges
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Several parts of the African Union’s Agenda 2063 refer to Africa’s need both to become self-reliant and finance its own development and to recognize the importance of accountable states and institutions at all levels. In its call to action, Agenda 2063 explicitly mentions strengthening domestic resource mobilization, building continental capital markets and financial institutions, and reversing illicit financial flows from the continent. However, the financing of Agenda 2063 has hardly been examined, even though it is known that more resources must be mobilized domestically to reduce external dependence and that in some countries the sources of revenue must be diversified. (Much of the same could be said about the post-2015 agenda and the recently concluded Financing for Development Conference). The question remains: Who will finance the Sustainable Development Goals and how?
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To the extent that the bulk of financing will come from domestic sources, African countries must without doubt enhance domestic resource mobilization and curtail illicit financial flows. A raft of factors related to capacity building (human, technical, legal, regulatory, and financial) still prevent African countries from mobilizing more resources domestically and from fighting illicit flows.
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On the tax side, investing in the capacity of revenue authorities must be part of a broader fiscal reform agenda that includes simplifying and rationalizing tax systems (for example, reducing tax exemptions and dealing with corruption within tax administrations). The computed tax effort indices for African countries show that several countries, including resource-rich ones, are not making enough effort to collect taxes.
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More and better trained staff must be hired by the revenue authorities and retained with the right financial incentives, and they must be allowed to do their work without political interference. More needs to be done to build the capacity of revenue authorities to engage with taxpayers and foster a culture where taxation is seen as contributing to essential services. This means that governments need to be transparent and efficient on expenditures.
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Donors are potentially important in building tax capacity and enhancing domestic resource mobilization – including training staff, investing in infrastructure, and helping set up tax registries – but they allocate only a very small share of aid to these areas.
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The problem of illicit financial flows requires international cooperation and a global solution, but many African countries simply lack the capacity to deal with them. None of the countries surveyed showed evidence of successfully combating such flows. Substantial effort and political will are still required at the domestic level.
Key takeaways
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The African continent has made much progress in increasing tax revenues, but a number of countries lag behind. Compared with other regions of the world, tax collection systems in Africa remain expensive and inefficient. Several countries need to hire more and better trained staff members, who must be retained through financial and nonfinancial career-advancement incentives.
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The expenditure side is as important as the revenue side, if not more so. That is, citizens must be aware of what services they are getting in return for their tax contributions, and this means that governments must be transparent about program expenditures and must invest in awareness and education campaigns on taxation.
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Diverted public funds and wasteful government spending are serious problems in many African countries, reflecting poor governance, public administration, and institutions, with major imperatives for building capacity to mobilize domestic resources.
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Far more effort and political will are required to address illicit financial flows. This again entails hiring better trained staff with specialized skills and ensuring the cooperation of the local, regional, and international organizations responsible for tackling such flows.
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Building capacity for domestic resource mobilization is not merely about increasing tax revenue or savings. It also encompasses promoting good democratic governance, financial inclusiveness, and social justice – and creating the conditions and incentives for productive investments. The type of tax systems and funds for administrative procedures and the choice of financial models must be adapted to the characteristics of African economies and their production structures. The time is now ripe for African countries to go beyond traditional domestic resource mobilization – which is about increasing revenues and (public and private) savings – and to emphasize broad-based resource mobilization, in a holistic, transformational approach that considers national systems of innovation, imitative learning, and special harnessing of human capital.
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More investments are required in financial inclusion and product innovation, and human resources must be mobilized for the innovations needed for broad-based domestic resource mobilization.
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It is necessary to build institutional and human capacity for scaling up domestic resource mobilization. The capacity of institutions in the resource mobilization chain must be reinforced. And rules and regulations must be in place to ensure sound public financial management so that domestic resources promote inclusive and sustainable development.
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It is important to enact legal system reforms aimed at law reform, especially where the laws are inadequate or poorly functioning. Countries need to undertake reforms in the areas of taxation, banking, and capital markets. They need to maintain flexible yet effective laws and regulations to access nontraditional sources of finance and curb illicit financial flows. And they need to further develop tax reforms that will ensure tax harmonization and a move away from tax exemptions, concessions, and holidays.
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Along with the required rules, regulations, and human capacities must be the capacity of key continental, regional, and national institutions to improve domestic resource mobilization. These include the African Union Commission and its organs (especially those that deal with legal, audit, tax, and parliament related issues). They also include such specialized institutions as the ACBF, the African Development Bank, the African Tax Administration Forum, the Collaborative Africa Budget Reform Initiative, and the UN Economic Commission for Africa. And they include regional economic communities, especially the African Union-recognized groups that will play a great role at the regional level in the domestic resource mobilization chain. At the core, however, are national tax administration and revenue authorities.
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There is a need to foster visionary leadership, to change mindsets, and to address other soft capacities. A key element for successful domestic resource mobilization starts with effective, visionary, committed, and accountable leadership that sets the right tone at the top. Positive social norms, values, and practices conducive to domestic resource mobilization are needed, but the ability and willingness to learn from experience is equally important.
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African countries launch AFR100 to restore 100 million hectares of land
Commitments from 10 countries announced at the Global Landscapes Forum
African countries launched AFR100 (African Forest Landscape Restoration Initiative), a pan-African, country-led effort to restore 100 million hectares (386 thousand square miles) of degraded and deforested landscapes by 2030. The AFR100 target of 100 million hectares has been endorsed by the African Union. So far 10 African countries have agreed to join AFR100 and committed at least 31.7 million hectares of land for forest landscape restoration. AFR100 partners are earmarking more than USD $1 billion in development finance and more than $540 million in private sector impact investment to support restoration activities.
The announcement was made during the Global Landscapes Forum at the Conference of Parties (COP21) in Paris, where forest landscape restoration is a key ingredient of the global movement to adapt to and mitigate climate change. Commitments made through AFR100 build on significant climate pledges made by many African countries to support a binding global climate agreement.
“Restoring our landscapes brings prosperity, security and opportunity,” said Dr. Vincent Biruta, Minister of Natural Resources in Rwanda. “With forest landscape restoration we’ve seen agricultural yields rise and farmers in our rural communities diversify their livelihoods and improve their well-being. Forest landscape restoration is not just an environmental strategy, it is an economic and social development strategy as well.”
For the first time, AFR100 brings together political leadership with an ambitious package of financial and technical resources to support a large-scale forest landscape restoration effort across Africa. Nine financial partners and 10 technical assistance providers have pledged support, led by the New Partnership for Africa’s Development (NEPAD Agency), Germany’s Federal Ministry for Economic Cooperation and Development (BMZ), and World Resources Institute (WRI).
“The scale of these new restoration commitments is unprecedented,” said Wanjira Mathai, Chair of the Green Belt Movement and daughter of Nobel Peace Prize Laureate Wangari Maathai. “I have seen restoration in communities both large and small across Africa, but the promise of a continent-wide movement is truly inspiring. Restoring landscapes will empower and enrich rural communities while providing downstream benefits to those in cities. Everybody wins. ”
Countries that have agreed to join the AFR100 initiative include:
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Democratic Republic of Congo | 8 million hectares
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Ethiopia | 15 million hectares
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Kenya | Committed, but finalizing hectare target
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Liberia | 1 million hectares
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Madagascar | Committed, but finalizing hectare target
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Malawi | Committed, but finalizing hectare target
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Niger | 3.2 million hectares
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Rwanda | 2 million hectares
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Togo | Committed, but finalizing hectare target
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Uganda | 2.5 million hectares
AFR100 builds on the climate commitments made by African countries. So far, 13 of the INDCs (Intended Nationally Determined Contributions) submitted by African countries include restoration, conservation of standing forests, or “climate-smart” agriculture. According to WRI analysis, following through on the commitments would cumulatively reduce emissions by 1.2 Gt CO2 eq over the next 10 years, or 36 percent of Africa’s annual emissions and 0.25 percent of global emissions.
“Restoration is really Africa’s gift to the world,” said Dr. Andrew Steer, president and CEO, World Resources Institute. “As the world forges a climate agreement in Paris, African countries – which bear the least historic responsibility for climate change – are showing leadership with ambitious pledges to restore land. These countries are well on their way to meet the goal of restoring 100 million hectares of land, which will help sequester carbon and bring economic benefits to low-income, rural communities. These African leaders are turning their words into action and making a real contribution to respond to the global threat of climate change.”
AFR100 recognizes the benefits that forests and trees can provide in African landscapes: improved soil fertility and food security, greater availability and quality of water resources, reduced desertification, increased biodiversity, green jobs, economic growth, and increased capacity for climate change resilience and mitigation. Forest landscape restoration has the potential to improve livelihoods, especially for women. For example, 20 years ago, women in southern Niger spent an average of 2.5 hours daily collecting firewood, which was scarce in the degraded landscape. Now they prune on-farm trees saving two hours a day, time that can be spent on other income generating activities.
Commitments announced through AFR100 also support the Bonn Challenge, a global target to bring 150 million hectares of land into restoration by 2020 adopted in Germany in 2011, the New York Declaration on Forests that extends that challenge to 350 million hectares by 2030, and the African Resilient Landscapes Initiative (ARLI), an initiative to promote integrated landscape management with the goal of adapting to and mitigating climate change. With these new partners, the Bonn Challenge process has surpassed the 100 m hectare mark, on track to meet its goal well ahead of the 2020 target date.
AFR100 builds on a strong tradition of successful forest landscape restoration in Africa. In Ethiopia’s Tigray region, local communities have already restored over 1 million hectares, making the land more drought-resistant. In Niger, farmers have increased the number of on-farm trees across 5 million hectares of agricultural landscapes, improving food security for 2.5 million people. AFR100 will provide a forum for countries and communities to share knowledge and resources to achieve restoration at a greater scale.
“We know that restoration works for Africa. We’ve seen it work in countries as diverse as Malawi, Ethiopia, and Mali,” said Dr. Ibrahim Assane Mayaki, CEO of NEPAD and former Prime Minister of Niger. “But we need to scale up restoration across the whole continent – more than 700 million hectares of land in Africa have potential for restoration. AFR100 provides a platform to work together more effectively to accelerate the achievement of restoration successes to benefit tens of millions of people who are currently searching for ways to adapt to climate change and improve their well-being.”
AFR100 will help to translate ambitious commitments into action with support from private sector investors, foundations, development banks, and bilateral and multilateral funders. AFR100 will leverage a variety of financing, including grants, equity investments, loans, risk management guarantees and funds for specific interventions.
So far, AFR100 partners have set forth over USD $1 billion of development financing:
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World Bank: USD $1 billion in investment in 14 African countries by 2030, as part of the Africa Climate Business Plan to support Africa’s climate resilient and low carbon development
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Germany’s Federal Ministry for Economic Cooperation and Development (BMZ) is providing support for the development of the AFR100 initiative
Impact investors have already earmarked USD $546.5 million for restoration under AFR100:
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Ecoplanet Bamboo: USD $175 million by 2020
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Sustainable Forest Investments – Netherlands: USD $150m by 2030
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Terra Global Capital: USD $100 million by 2030
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Green World Ventures: USD $65 million by 2020
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Moringa Partnership: USD $56.5 million by 2030
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NatureVest (impact investment arm of the Nature Conservancy)
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Permian Global
“Through AFR100, we expect to trigger one of the largest investments in forest landscape restoration the world has ever seen,” said H.E. Dr. Gerd Müller, Federal Minister for Economic Cooperation and Development, Germany. “This investment is vital for empowering local communities to scale up the inspiring restoration successes we’ve seen in Africa over the last decade.”
In addition to new financing, a coalition of organizations will provide technical assistance on a wide range of activities, including the mapping of restoration opportunities, securing further financing, and implementing restoration efforts on the ground. Partners include World Resources Institute (WRI), Clinton Foundation, Food and Agriculture Organization of the United Nations (FAO), International Union for Conservation of Nature (IUCN), Jane Goodall Institute (JGI), Kijani, New Partnership for Africa’s Development (NEPAD Agency), The Landscapes for People, Food and Nature Initiative (LPFN), and The Nature Conservancy (TNC).
NEPAD (New Partnership for Africa’s Development), an African Union strategic framework for pan-African socio-economic development, is both a vision and a policy framework for Africa in the twenty-first century. NEPAD is a radically new intervention, spearheaded by African leaders, to address critical challenges facing the continent: poverty, development and Africa's marginalisation internationally. NEPAD provides unique opportunities for African countries to take full control of their development agenda, to work more closely together, and to cooperate more effectively with international partners. www.nepad.org
BMZ (Germany’s Federal Ministry for Economic Cooperation and Development) develops the guidelines on which German development policy is based and provides the bulk of funding for German development cooperation. www.bmz.de
World Resources Institute is a global research organization that spans more than 50 countries, with offices and staff in the United States, China, India, Brazil, Indonesia, and six African countries and more. Our more than 500 experts and staff work closely with leaders to turn big ideas into action to sustain our natural resources – the foundation of economic opportunity and human well-being. www.wri.org
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Maputo is ranked as Africa’s large city with the highest growth potential – MasterCard Index
MasterCard African Cities Growth Index assesses inclusive urbanization and growth potential of 74 African cities
Maputo, the capital of Mozambique, is the large African city with the highest potential for inclusive growth, according to the 2015 MasterCard African Cities Growth Index (ACGI). Casablanca (Morocco) and Lagos (Nigeria) rank second and third respectively.
Now in its third year, the ACGI maps African cities’ economic outlook according to their potential for inclusive urbanization. The 74 analysed cities are organised into three categories by population size: large (over one million), medium (between 500,000 and one million) and small (under 500,000). Twenty five economic and social inclusion indicators rank cities’ level of inclusive urbanisation, forecasting potential for inclusive growth. Once ranked, the cities fall into one of four bands describing their inclusive growth potential – high, medium-high, medium-low or low.
“The ACGI assesses the potential of Africa’s cities to increase the well-being of their urban populations,” says Professor George Angelopulo of the University of South Africa, author of the 2015 ACGI. “As inclusive urbanisation is a prerequisite for inclusive growth, the study presents a measure of each city’s potential as a place to live, work and do business in the coming years.”
Maputo’s inclusive growth potential falls into the medium-high category, attributed to its share of Mozambique’s foreign direct investment (FDI), which as a percentage of national GDP is among the highest in the world. The city boasts constantly improving levels of government effectiveness, regulatory quality, and ease of doing business.
Angelopulo notes that Casablanca – ranked second among large cities – is the only North African city with medium-high growth potential, supported by Morocco’s relative stability in a turbulent region. In Lagos (Nigeria), the third-ranked large city which also has medium-high growth potential, the increase in percentage of middle class households is significant due to the number of citizens that increase represents, and the effect they will have on future consumption in the city.
The 2013 and 2014 top-ranked city, Accra (in Ghana), now ranks seventh due to lower than anticipated revenue from the country’s Jubilee oil fields, exacerbated by the collapse of the oil price. The cost of wage increases, subsidies and debt repayments further undermines economic expansion projected for Accra.
“Each city assessed by the ACGI has a unique set of socio-economic, cultural and political factors that influences its growth trajectory,” says Angelopulo. “However, a city’s response to the drivers of population growth, urbanisation and an increasing middle class ultimately determines the upward or downward direction of its inclusive growth.”
“Cities with skilled and educated populations, low levels of crime and corruption, higher discretionary income, regulatory stability and predictable commercial environments are beacons for talent, business and investment, and they offer their citizens greater promise than cities without these characteristics,” he says.
The only large cities in Southern Africa are located in South Africa, and all rank lower than in the 2014 ACGI report. Slow economic growth combined with increasing populations make it likely that South Africa’s cities are likely to experience greater inequality over the next decade. Pretoria is the South African city with the greatest potential for inclusive growth, followed by Johannesburg, Durban, Cape Town and Port Elizabeth.
Matola, adjacent to Maputo to the west, is the ACGI’s medium-sized city with the highest potential for inclusive growth. It is also the city with the highest potential for growth throughout Mozambique, suggesting the positive outlook for the inclusive economic growth and development of Mozambique in the future. Matola is followed by Nouakchott (Mauretania) and Libreville (Gabon). All three cities have medium-high inclusive growth potential.
Of the small cities assessed, Windhoek (Namibia) and Victoria (Seychelles) rank first and second respectively with medium-high inclusive growth potential. Gaborone (Botswana) is third, with medium-low inclusive growth potential.
Daniel Monehin, Division President for Sub-Saharan Africa, MasterCard believes that cities have a leading role to play in economic growth, particularly in the developing world where rapid urbanisation and an expanding middle class characterise the evolution of most of them.
“However, inclusive growth is not possible without appropriate financial services and instruments in place to benefit the under banked and those excluded from the formal banking system. The only way to ensure sustained, inclusive economic growth is through the financial inclusion of all individuals, communities and countries – starting with the inclusive development of cities.”
By supporting and investing in academic research like the ACGI, which provides insights into the opportunities for investment, commerce and higher standards of living in Africa, MasterCard provides valuable business intelligence to its customers, local governments and the investment community at large.
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Draft decision agreed on assisting the integration of small economies into world trade
WTO members meeting as the General Council agreed on 30 November on a draft ministerial decision aimed at addressing the challenges faced by small economies. This draft decision has been forwarded to the Nairobi Ministerial Conference for adoption by ministers later this month.
The draft decision reaffirms members’ commitment to the WTO work programme on small economies, adopted in 2002. The objective of the programme, which is carried out in dedicated sessions of the Committee on Trade and Development, is to address the trade-related issues facing small, vulnerable economies (SVEs) and to help them integrate into the multilateral trading system. Recommendations made by the dedicated session are forwarded to the WTO’s General Council for action.
SVEs account for only a small percentage of world trade. WTO members recognize that these economies, while not forming an official sub-category of members, face specific challenges due to their small size and the distance which separates them from their key trading partners.
The SVEs have made several proposals in the Doha Round negotiating groups and in other WTO bodies, mainly regarding agriculture, industrial goods, services, rules, including fisheries subsidies, and trade facilitation. A compilation of these proposals and past General Council and ministerial decisions is available in document WT/COMTD/SE/W/22/Rev.7.
The draft decision forwarded to the Ministerial Conference requires the WTO Secretariat to continue its work on addressing the challenges experienced by small economies when linking into global value chains for trade in goods and services, and to conduct work on the challenges small economies experience in their efforts to reduce trade costs, particularly in the area of trade facilitation.
The draft decision says:
“The Ministerial Conference decides as follows:
We reaffirm our commitment to the Work Programme on Small Economies and take note of all the work conducted to date. In particular, we note that document WT/COMTD/SE/W/22/Rev.7 and its previous revisions reflect the work of the Dedicated Session up to the Tenth Ministerial Conference. We take note of the work carried out since 2013, including that on the challenges and opportunities faced by small economies when linking into global value chains in trade in goods and services, and instruct the CTD to continue its work in Dedicated Session under the overall responsibility of the General Council.
Furthermore, we instruct the Dedicated Session to consider in further detail the various submissions that have been received to date, examine any additional proposals that Members might wish to submit and, where possible, and within its mandate, make recommendations to the General Council on any of these proposals. The General Council shall direct relevant subsidiary bodies to frame responses to the trade-related issues identified by the CTD with a view to making recommendations for action. We instruct the WTO Secretariat to provide relevant information and factual analysis for discussion among Members in the CTD’s Dedicated Session, inter alia, in the areas identified in item k of paragraph 2 of the Work Programme on Small Economies and, in particular, to continue its work on the challenges and opportunities experienced by small economies when linking into global value chains in trade in goods and services. We request the Secretariat to also conduct work on the challenges small economies experience in their efforts to reduce trade costs, particularly in the area of trade facilitation.
The CTD in Dedicated Session shall continue monitoring the progress of the small economy proposals in WTO bodies and in negotiating groups with the aim of providing responses, as soon as possible, to the trade-related issues identified for the fuller integration of SVEs in the multilateral trading system.”
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Africa means business on global warming – does the rest of the world?
Africa has much to offer the world in the battle against climate change, but fellow leaders at the Paris climate talks must also be prepared to do their bit
The term “glacial pace” takes on real and literal meaning with climate change. The disappearance of our glaciers may have hastened dramatically, but our efforts to stop them doing so have moved at a truly glacial pace. This has to change, right now.
Since the Kyoto protocol came into being, we have failed miserably to protect our planet. Current trajectories show the world is on track towards a temperature rise of about 3°C by 2100. Climate talks in Paris this month are our last chance to turn the tide.
We have long known that Africa, which causes the least environmental damage, suffers the most from the harm others cause. The World Meteorological Organisation recorded more than 1,300 climate-related natural disasters in Africa from 1970 to 2012, which claimed 700,000 lives and caused economic damage worth $26.6bn (£17.6bn).
A decade ago, at COP 11 in Montreal in 2005, Africa had no common position and no common negotiators. This year, at COP 21, it has a Conference of African Heads of State on Climate Change; it has an expert team of about 200 climate negotiators; it has a clearly outlined position on the negotiations; and it has a well-articulated collective work programme to support low-carbon and climate-resilient development on the continent.
So Africa means business on climate change. It comes to Paris not just with hope, but with something to offer. It brings three big “gives” to the rest of the world, and three big “asks”.
First, Africa gives its own commitment – and the cast-iron evidence – that it will join the rest of the world in taking climate change seriously. Forty-seven out of 53 countries in Africa had already completed their “intended nationally determined contributions” by the 1 October deadline. Each national plan states what the country can do, from tiny Comoros committing to cutting emissions by 85% in 15 years, to Ethiopia announcing plans to cut its emissions growth by 64% in the same period. African countries have demonstrated greater ambition in cutting their emissions than the high-emitting nations.
Second, Africa makes the gift – to itself and the world – of its enormous renewable energy resources. That potential is breathtaking: the continent can source an additional 10 terawatts of solar energy, 1,300 gigawatts of wind power, and 15GW of geothermal potential. That power, if used to the full and responsibly managed, will not just solve Africa’s own energy problems but also those of other countries near and far.
Third, Africa gives to the world a share of the gigantic atmospheric vacuum cleaners that are its natural tropical forests. It has an estimated 650m hectares (1.605bn acres) of untouched forest, almost a fifth of the world’s stock. These carbon sinks can suck in 1.2bn tonnes of carbon dioxide a year – about half the carbon dioxide emissions from all the homes in the US. And they can do this, even under the threat of deforestation and forest degradation. If we can preserve our forest, for instance in the Congo basin, we can absorb more of our own and the world’s carbon dioxide.
But Africa, of course, seeks support in kind from the world. It brings three “asks” to COP21, all of which are aimed at completing the circle of giving.
First, Africa asks for adequate finance – at least $11bn a year – to help it adapt to climate change. Only 4% of the world’s total adaptation finance ends up in sub-Saharan Africa, a situation that demands immediate reform. Africa, which is already short-changed on climate change, must not be short-changed on climate finance. Communities that have contributed the least to climate change should not be the ones picking up the tab when Mother Earth fights back. As we write, southern and eastern Africa are suffering floods and droughts respectively, brought about by the worst El Niño – warm winds blowing off warm waters – in decades.
Second, Africa asks the world to join it in investing at least $55bn a year in its energy sector up to 2030. Why? Mainly because this would bring full energy access to more than 600 million Africans who do not have that today. Patchy energy means patchy business, patchy health and patchy education. It means diminished life. The lack of energy has put the brakes on Africa’s development.
Why should the rest of the world buy into this? Because, by developing clean energy in Africa, we will collectively remove billions of tonnes of greenhouse gases from the air. And because – given the returns on renewable energy – we will collectively unlock millions of dollars in new business opportunities. Witness the solar power project in Ouarzazate in Morocco which has generated 500MW and cut an annual 760,000 tonnes of carbon dioxide from the atmosphere.
The third and last ask is that the countries of the world reassess the demands they are making of one another. Limiting the global temperature rise to 2°C is not enough: we stand with the International Panel on Climate Change in wanting a revised target of 1.5 degrees.
The continent of proverbs reminds us that “in moments of crisis, the wise build bridges”. We are indeed in a crisis, and Africa is asking the rest of the world to join us in building bridges to a safer world. So let’s be wise in Paris.
Akinwumi Adesina is the president of the African Development Bank
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African Ministerial Conference on Environment: Remarks by UN Secretary-General Ban Ki-Moon
Remarks at the meeting hosted by the African Ministerial Conference on Environment (AMCEN): Africa Pavilion at COP21, Paris, 6 December 2015
Your Excellency, Dr. Khaled Fahmy, Minister of Environment of Egypt, and President of the African Ministerial Conference on the Environment,
Distinguished Ministers,
Ladies and Gentlemen,
I am grateful for this opportunity to engage with you at this critical time in the negotiations.
I will give very brief opening remarks but mostly I am here to listen to you.
I value your frank reflections on the status of the negotiations and on Africa’s priorities.
I believe COP21 remains on track to achieve our common objective of reaching a meaningful universal climate agreement. Generally, we see a very positive mood and goodwill prevailing around the CoP21 process.
As I said last week, Africa has an enormous stake in the conference’s success.
Your personal engagement and ownership are essential to securing the ambitious agreement that Africa’s people and the entire world need.
Already, your leadership has helped make 2015 a year of opportunity.
In July, we adopted the Addis Ababa Action Agenda on Financing for Development.
At the historic gathering in New York in September, we adopted the 2030 Agenda for Sustainable Development and the 17 SDGs.
Now, here in Paris, governments have the opportunity to secure a global climate change agreement that can pave the way towards a safer, healthier, more prosperous and sustainable future.
Climate Change may be just one of the seventeen Sustainable Development Goals, but without addressing it properly, all remaining 16 goals cannot be fully implemented. It is critically important that we have a vision implemented in Paris.
Africa is particularly vulnerable to the effects of climate change.
Much of its economy depends on a climate-sensitive natural resource base, including rain-fed subsistence agriculture.
This is an area of great opportunity for adaptation and mitigation.
Some of your governments are already encouraging agricultural practices that are adaptaed to climate change and are reducing emissions.
On the other hand, disruptions in food or water supplies pose serious risks, not only for your economies but also for political stability, particularly in fragile states.
I am encouraged by the strong contribution Africa is making, against this challenging backdrop, to shift the narrative on climate action from burden sharing to opportunity sharing.
Earlier this week, I had the pleasure of joining President Al-Sisi, President Hollande and other leaders to launch the African Adaptation Initiative and the African Renewable Energy Initiative.
These two initiatives clearly demonstrate Africa’s leadership by example.
Through cooperative action, countries and regions can accelerate the transformation to low-emissions climate-resilient economies that meet the development needs of citizens in a sustainable manner.
I also commend Africa’s commitment to speaking with one voice in the negotiations.
I strongly encourage you to continue to do so.
United, you are a powerful bloc of 54 nations, and your interests will be better served.
I understand a number of key issues of importance to Africa have yet to find resolution in the emerging Paris package.
Let me list four.
First, adaptation. This must be treated throughout the package in a balanced manner.
Second, differentiation. This, too, should be reflected across all the elements of the package.
Third, ambition. We need to individually and collectively raise the level of ambition to limit temperature rise to below 2 degrees.
Fourth, financing. This is necessary to support urgent adaptation, capacity building and technology development and transfer needs.
Financing is of course also essential for implementing your respective national contributions.I thank you for developing and submitting your INDCs.
I appreciate the tremendous national effort involved, and how they are a demonstration of good faith in the global process.
I have been impressing upon developed and developing country partners as well as non-state actors that financing is not charity.
We all should understand that financing is a tool that helps us raise collective ambition.
I also appreciate the importance you place on pre-2020 ambition.
We can’t afford complacency between now and 2020.
We must keep and build the momentum.
African countries have shown great determination and vision throughout this process.
I will continue to count on your partnership and leadership.
With that, I invite your views.
Thank you.
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COMESA: 96% of all the reported Non-Tariff Barriers resolved
About 95.9% of all the reported Non-Tariff Barriers to regional trade in COMESA have been resolved since the introduction of the online system of reporting, monitoring and elimination in 2008.
According to a status report presented to the 35th COMESA Intergovernmental Committee (IC) which concluded its three days meetings in Zambia, Saturday 5 December 2015, a total of 171 NTBs have been recorded between COMESA Member States on the online system.
Out of these, only even are outstanding representing 4.1% of the reported NTBs.
The outstanding NTBs are those affecting trade in freezers and fridges, UHT milk, palm based cooking oil, soap, wheat flour, bottled soya oil and import licenses and surcharges on various products.
Countries whose bilateral trade has been affected by these NTBs include Swaziland, Zimbabwe, Kenya, Zambia, Madagascar, Mauritius, Egypt and Rwanda.
In an effort to reinforce the current initiatives to eliminate the remaining NTBs, COMESA has now developed NTB Regulations to provide an efficient mechanism to address these barriers.
The Regulations which have been circulated to Member States outlines the steps that concerned parties should go through. Specifically the Regulations require Member States to establish National Focal Points as well as National Monitoring Committee on NTBs.
According to the Regulations, the initial stage of resolving the NTB is the exchange of information regarding an NTB between the imposing and recipient Member State. If the parties fail to resolve the NTB at this stage, they will engage a facilitator to provide factual information aimed at resolving the matter. The outcome of these proceeding will be enforced under article 171 of the COMESA Treaty that provides for sanctions.
The new Regulations followed a decision of the 33rd COMESA Council of Ministers meeting held in Zambia in December 2014 that sought to break the existing stalemate in resolving NTBs.
They are also aimed at enforcing Article 49 (1) of the COMESA that calls on Member States to eliminate all existing non-tariff barriers and to refrain from imposing new ones.
The IC which comprises Permanent/Principal Secretaries from COMESA Coordinating Ministries in all Member States called on government to engage economic operators by educating and building their confidence to enable speedy resolution of arising issues.
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UNEP releases full version of Emissions Gap Report
The United Nations Environment Programme (UNEP) has released the full version of the 2015 Emissions Gap Report, which found that the world was around halfway toward the emissions cuts needed to limit global temperature rise to 2°C by 2100.
The report presents an assessment of the 119 Intended Nationally Determined Contributions (INDCs) submitted the UN Framework Convention on Climate Change (UNFCCC) by 1 October 2015.
It found that efforts to tackle climate change, including those taken before the Paris agreement and full implementation of the INDCs, could cut up to 11 GtCO2e from projected emissions in 2030.
The year 2015 has the potential to become a turning point in global efforts to transform the prevailing social and economic development paradigm into a more sustainable one.
The global community reached agreement in September 2015 on a set of 17 sustainable development goals to be achieved by 2030, including climate change. Countries will meet again at the United Nations Framework Convention on Climate Change (UNFCCC) 21st Conference of the Parties (COP 21) in Paris with the aim of establishing a new global agreement on climate change, hereafter the ‘Paris Agreement’, with the ambition of limiting changes in global temperatures to below 2°C or 1.5°C warming in 2100 compared to pre-industrial levels. The Paris Agreement will also aim to establish a framework to provide technological and financial support for developing countries to accelerate the transition towards low carbon and climate resilient development paths.
The architecture of a new climate agreement has many facets with an array of issues under negotiation that have become significantly more complex since the Framework Convention on Climate Change entered into force in 1994. The core structure of the Paris Agreement will comprise the “Intended Nationally Determined Contributions” (INDCs) as well as the process by which implementation of the agreement will proceed over time to advance the objectives of the UNFCCC. In addition, a number of key decisions will be required covering issues like adaptation, finance, technology, and capacity building.
What is covered in the 2015 Emissions Gap Report?
This sixth UNEP Emissions Gap Report provides a scientific assessment of the mitigation contributions from the submitted INDCs. As in the previous reports, it then compares the resulting emission levels in 2030 with what science tells us is required to be on track towards the agreed target of a global average temperature increase below 2°C by 2100. The Report also provides data for the aspirational target of keeping the temperature increase below 1.5°C. In addition, the Report presents selected areas where enhanced action can be taken, accelerated and scaled up to close the emissions gap.
The 2015 Emissions Gap Report addresses the following key questions:
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What are the latest estimates of 2025 and 2030 total global emissions levels consistent with the goal of holding the global average temperature rise below 2°C or 1.5°C above pre-industrial levels by 2100?
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What is the progress on implementation of the Cancun pledges for the period to 2020?
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Will the combined INDC commitments for 2030 (if fully implemented) be sufficient to stay within the range consistent with the 2°C temperature goal?
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What are possible contributions in selected key areas, where action can be accelerated to enhance the ambition of national pledges both in the period before and after the expected entry into force in 2020 of the Paris Agreement? This year the detailed assessment is on possible mitigation contributions from International Cooperative Initiatives (ICIs) and enhanced forest-related mitigation activities with a focus on Reducing Emissions from Deforestation and Forest Degradation (REDD+).
By 1 October 2015, a total of 119 INDCs had been submitted to the UNFCCC. Fifteen INDCs included only mitigation, while most included both adaptation and mitigation components. The report only presents qualitative information about the adaptation component of the INDCs submitted.
The report has been prepared by an international team of leading scientists assessing all available information, including that reviewed by the IPCC in its fifth assessment report, as well as more recent scientific studies. The assessment production process has been transparent and participatory. The assessment methodology and preliminary findings were made available to governments and stakeholders concerned during relevant international fora as well as on the UNEP Live website. The governments of the countries with specific mention in the report have been invited to comment on the assessment findings.
What are current emissions and what emission levels in 2030 are consistent with the 2°C and the 1.5°C targets?
Over the past decades global GHG emissions have been increasing steadily, with small variations around a longer term trend.
The most recent global emission estimates are available for the year 2014. In that year, total global Kyoto-GHG emissions amounted to about 52.7 GtCO2 e (range: 47.9-57.5). Global carbon-dioxide (CO2) emissions from fossil-fuel and industry were estimated at 35.5 GtCO2 for 2014 (range: 32.5-38.5).
Staying below 2°C temperature rise implies that CO2 emissions are reduced to net zero by 2060-2075.
The IPCC in its fifth assessment report concluded that to limit global warming to below 2°C, the remaining cumulative CO2 emissions – the so-called carbon budget – are in the order of 1 000 GtCO2. This remaining budget can be utilized in different ways, but given the most recent assessment of current trends, net global carbon emissions will eventually need to be reduced to zero between 2060 and 20753. For a detailed discussion of the carbon budget, see the 2014 Emissions Gap Report.
The 2015 Report presents an updated set of possible pathways to stay within this budget, and also includes an updated assessment of the pathways and requirements to stay within the more ambitious 1.5°C temperature goal.
The median emission level in 2030 in scenarios that have a >66 per cent chance of keeping temperature increase to below 2°C by the end of the century is 42 GtCO2 e (range: 31-44). The similar level for a 1.5°C pathway is 39 GtCO2 e4. The trajectories for the two target levels are similar in many aspects, but earlier and much stronger action is necessary for the 1.5°C target to be kept.
As reflected in last year’s report, the focus for the gap assessment has shifted from 2020 to 2030, reflecting that the underlying scenarios assume emission levels that are consistent with the Cancun pledges until 2020. Least-cost enhanced emission reduction pathways are only assumed from 2020. Earlier analysis assumed the world would move onto a least-cost pathway by 2010. Current trends indicate that this will not be the case, and accordingly the new set of scenarios from the IPCC, which are referenced in this report, include only those that assume least-cost pathways starting from 2020.
Can the INDC process become a foundation for enhancing ambition?
It is clear from the assessment of the mitigation contributions from the INDCs that much more needs to be done. This round of INDCs should therefore be considered as the first step in building foundations for a successful global climate agreement. The social and political effects of the INDCs and the processes undertaken at national level transcend the aggregate effect they are estimated to have on total global GHG emission levels in 2025 and 2030. The preparation of the INDCs has in many countries incentivized exploration of linkages between development and climate, as well as development of new national climate polices, and can be seen as an important step in a transition towards low carbon economies.
The Paris Agreement can support these national transitions and provide the framework for mobilization of the enhanced mitigation effort that is required to align national efforts with the global mitigation ambition indicated by the 2°C pathways. Establishing a robust, effective and transparent follow-up and review framework as part of the Paris Agreement will be critical in this context.
The INDCs and options for enhanced mitigation action must be seen in the broader context of economic growth and sustainable development. The Sustainable Development Goals (SDGs) recently adopted in New York by Heads of State of all member states of the United Nations explicitly recognise the interdependence between the achievement of climate, development and sustainability goals and recommends prioritizing coherence, co-benefits, and complementarity between the SDGs and a climate change agreement under the UNFCCC.
The SDG Goal 13 “Take urgent action to combat climate change and its impacts” specifically acknowledges that the United Nations Framework Convention on Climate Change is the primary international, intergovernmental forum for negotiating the global response to climate change, and the targets associated with the goal are clearly aligned with the ambitions in the INDCs.
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tralac’s Daily News selection: 4 December 2015
The selection: Friday, 4 December
Selected updates from the FOCAC 2015 summit:
China announces $60 bn for African development plan (BRICS Post)
Raw materials: Africa pushing to curb exports (IOL)
Download the presentations from yesterday's SAIIA-DEGRP workshop: China-Africa - a maturing relationship?
African consultations on migration: factoring in the outcomes of the Valetta Summit (AU)
The AU recognizes that a comprehensive approach with a long term vision is required to address the root causes of irregular migration and promote regular channels of migration. More specifically, taking cognizance of the fact that 20 AU Member States and 6 RECs were not invited to Valletta, the Nairobi consultations (14-15 December) are designed to provide a forum for all 54 AU Member States and RECs to discuss the Migration Agenda and identify key priority areas that require immediate action in the short and medium term within the framework of AU policies and programs and Assembly Declaration on Migration at the 25th African Union Summit in Johannesburg in June 2015, as well as other relevant instruments such as the Valletta Action Plan.
Expected outcomes: agree on a set of actions at national, regional and continental levels that would give effect to or operationalize the key AU instruments, programs and decisions; identify high impact projects that could be realistically implemented in 2016 in the management of migration; enhance a common understanding of all available funding instruments - including the EU Trust Fund for Migration - that can be used to advance the AU migration agenda. [Workshop draft agenda, the Valetta Summit]
Southern Africa workshop: priority actions to address mixed, irregular migration (IOM)
Labour markets in Sub-Saharan Africa: download the presentations (DPRU)
African Union warms up for CFTA negotiations (ICTSD)
As we approach the start of negotiations for the establishment of the Continental Free Trade Area, the AU held a series of three meetings on enhancing intra-African trade from the 23 to 27 November. These meetings, organised with the Trade Law Centre in Cape Town, examined the progress and prospects for regional integration in the context of the CFTA; the issue of modalities for services negotiations of the CFTA; as well as the monitoring of the implementation of the AU Action Plan for Boosting Intra African Trade.
Download the AU-tralac workshop reports: CFTA negotiations - key preparatory issues, Trade in services - modalities for CFTA negotiations
Rob Davies: 'Working towards continental free trade' (IOL)
Africa loses over 40% of competitiveness because of the absence of or poor and inefficient infrastructure. Adequate, effective, affordable and well-maintained infrastructure is, therefore, needed to support economic growth, attract investment and enhance service delivery.
New COMESA industrialization policy in focus at Intergovernmental Committee meetings (COMESA)
The Minister acknowledged the challenges that Member States were facing in implementing some of the agreed COMESA programmes and in particular those that require policy and regulatory framework amendments such as the Customs Union. Among them, the loss of revenue, uncompetitiveness of industry or low levels of industrialization. COMESA’s SG observed that despite the excitement generated by academicians, economic commentators and political leaders a few years ago about "Africa Rising", the reality on the ground was different. “The Africa Rising narrative described appearances and not the substance of our economies that are characterized by wrong specialization in the global economy of producing and exporting low value primary commodities with little or no processing as evidence by the abysmally low percentage of the contribution of industry to the national and regional gross domestic product,” he said. Mr Ngwenya said the answer to this challenge was in part, the implementation of the COMESA Industrial policy and other provisions of the COMESA Treaty on infrastructure, energy, agriculture, Natural resource management and environment, science and technology and human resource development.
Pan African Investment Code: update from Kampala meeting (AU)
EAC: Germany hails Partner States’ commitment to integration (EAC)
“For us, regional integration was not a loss of sovereignty but the regaining of sovereignty. That is why Germans have an ease when dealing with regional integration”, said Mr Schmidt, adding for the African continent, regional integration was a good way of mitigating the artificial boundaries drawn by the European colonial powers. Mr Schmidt was addressing the annual meeting of political advisers for Economic Cooperation and Development at the East African Legislative Assembly plenary hall in Arusha, Tanzania. The focus of this year’s meeting was on the aspect of regional economic and political integration, especially the role of RECs in Africa. Mr Schmidt led a 60-person delegation who engaged staff of the EAC on pertinent issues on regional integration in East Africa and by extension the African continent.
EALA roots for a stronger, more effective Pan-African Parliament (EALA)
EALA is rooting for an effective continental Assembly and one with legislative powers. Consequently, EALA yesterday afternoon passed a Resolution urging EAC Partner States to urgently sign, ratify and deposit the required instruments of the amended Protocol to the Constitutive Act of the African Union. This shall enable PAP to achieve one of its important pillar of legislation. The Resolution presented to the House by Hon Chris Opoka on behalf of Hon Mike Sebalu, notes that PAP has been exercising limited oversight, advisory role and consultative powers to the African Union, as the Organ that represents all peoples of Africa and the interests of Africans in the diaspora.
An African Master Plan: the solution to Africa’s transport challenges (AfDB)
Speaking at the closing ceremony attended by several African Transport Ministers, Solomon Asamoah, the Bank’s Vice-President for Infrastructure, Private Sector and Regional Integration, emphasized that Africa’s transport challenges needed to be addressed urgently for the continent to become competitive. He underlined the need for an integrated approach to the development of transport infrastructure systems within countries. This was supported by Angela Cassell-Bush, Liberia’s Minister of Transport, who called for an African Master Plan to help build a road network connecting Africa. “We need to review our various regulatory frameworks and come up with one for the whole continent. It will help to facilitate movement of people and boost trade,” she noted.
Strategic planning and reforms necessary to mend Africa’s transport sector (AfDB)
Current transport strategies are not pro-poor. They provide inadequate and unequal access, said Tesfamichael Nahusenay, Deputy Program Manager with Sub-Saharan Africa Transport Policy program (SSATP). The program estimates that about 60% of the rural population in Sub-Saharan Africa lives beyond two kilometres from an all-season road.
Central Africa called upon to consolidate consultation on road safety (UNECA)
The future of the port industry in Eastern and Southern Africa: presentation by Nozipho Nozipho Mdawe (PMAESA)
Food prices fall in November amid robust global inventories (FAO)
Major food commodity prices fell in November, reversing about half their rise in the previous month, as the cost of internationally-traded staples, except for sugar, fell across the board. The FAO Food Price Index averaged 156.7 points in November, down 1.6% from its revised October average, and 18% below its value a year earlier. The FAO Food Price Index is a trade-weighted index tracking international market prices for five major food commodity groups.
The Southern Africa sub-region is also facing some strains as early seasonal dryness linked to El Niño is impacting cropping activities for 2016 cereal crops. FAO now expects the 2015 regional output of coarse grains in Africa to drop by 12% to 67 million tonnes. Global coarse grain production for the year is projected to decline by 2% to 1.3 billion tonnes.
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African countries pledge to integrate decent work in their development strategies
The 13th African Regional Meeting, held in Addis Ababa, Ethiopia from 30 November to 3 December 2015, brought together ILO’s tripartite constituents – governments, employers and workers – along with the political, economic and social actors of the world of work in Africa, to address the imperative of promoting an inclusive and job-rich growth through decent work in Africa.
In their closing statement, the Addis Ababa Declaration: Transforming Africa through Decent Work for Sustainable Development, governments, employers, workers from 45 African countries have underlined the importance of full and productive employment and decent work for inclusive and sustainable development in creating new expanded opportunities and responsibilities for constituents and the Organization as a whole in national, regional and global policy making.
During the three-day meeting, hosted every four years by the International Labour Organization (ILO), representatives debated on the implementation of the 2030 sustainable development goals in the region while addressing key issues related to migration, youth employment and ICTs, green economy/jobs as well as the transition from the informal to the formal economy in Africa.
In their final declaration, delegates welcomed the significant role accorded to decent work in both in the African Union Agenda 2063 and the UN’s Transforming Our World: The 2030 Agenda for Sustainable Development.
Recognizing the importance of a decent work agenda, and its “new expanded opportunities and responsibilities for constituents and the Organization as a whole in national, regional and global policy making”, delegates pledged to integrate decent work more fully into national sustainable development strategies, as well as regional and global frameworks, and build stronger partnerships for progress.
ILO Director-General Guy Ryder closed the Meeting saying “Africa has said very clearly that governments, employers’ and workers’ organisations are ready to take up the challenge of shaping a development path that is sustainable because it is grounded in the central importance of decent work opportunities to families, communities and nations.”
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FOCAC starts today in South Africa
Ties between China and Africa are expected to strengthen as the Forum on China-Africa Co-operation (FOCAC) summit commences today, 4 December 2015.
The historic event, the first to be hosted in Africa, will run till tomorrow in Joburg, South Africa. It is co-chaired by Chinese President Xi Jinping, already in South Africa for a State Visit, and President Jacob Zuma.
Numerous heads of African states, representatives from the African Union (AU), heads of regional organisations and multilateral organisations are also participating in the summit, which has the theme “Africa-China progressing together: win-win co-operation for common development”.
The Johannesburg Declaration
A new declaration – the Johannesburg Declaration – will be adopted at the conclusion of the summit. It is an action plan to outline measures to consolidate the expanding relationship between Africa and China.
The summit will pick up on key areas of co-operation that the two sides have identified, including economic cooperation, infrastructure development, beneficiation, debt relief, industrialisation, investment promotion, market access expansion, co-operation in health, agriculture, science and technology, and education, as well as cultural and people-to-people exchanges.
The Johannesburg Declaration will also take into account the AU’s first 10-year implementation plan of Agenda 2063. The agenda is a continental vision for an African continent that is united, peaceful and prosperous, and which moves towards industrialisation and value-addition, infrastructure development and greater intra-African trade.
China and Africa partnership
The historical relationship between China and Africa has grown in the last few years. The oriental country has been Africa’s largest trade partner for six consecutive years and Africa is assuming growing importance as an investment and engineering contract destination for Chinese enterprises.
Over the past 15 years, the trade volume between China and Africa has soared from $10-billion (R144-billion at today’s exchange rate) to $220-billion. During the same period, China’s direct investment in Africa has sharply increased from $500-million to $30-billion.
South Africa’s relations with China remain central to realising its developmental agenda through foreign policy as it increases efforts to implement its National Development Plan; and collaborate in agriculture, environmental affairs, trade and industry, and finance. This comes as the country continues to drive the agenda of moving South Africa forward.
Arrival of Chinese president
President Xi arrived in South Africa on 2 December. In his arrival statement, he said the relationship between South Africa and China was at its best and had become a model of solidarity and co-operation between developing countries.
The two countries had “steadily enhanced political trust, deepened practical collaboration in all areas and engaged in dynamic people-to-people and cultural exchanges, and carried out interestingly close international co-operation”.
About FOCAC
Established in 2000, FOCAC aims to promote bilateral ties between China and Africa through dialogue. This year marks the 15th anniversary of the forum. It is the first time the ministerial meeting has been upgraded to a leader’s summit. This is seen as a reflection of the developing and growing relationship between the two sides.
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AfDB to support electricity access for all by 2030 with African Renewable Energy Initiative
Africa has launched an ambitious African Renewable Energy Initiative (AREI) as the continent’s a major contribution to Conference of Parties (COP21) taking place in Paris, France.
The launch of the initiative which aims to produce 300 gigawatts (GW) of electricity for the continent by 2030 is a demonstration of Africa’s leadership in the UN climate negotiations.
The initiative’s goals are to help achieve sustainable development, enhance well-being and sound economic development by ensuring universal access to sufficient amounts of clean, appropriate and affordable energy.
The project also aims to help African countries leapfrog towards renewable energy systems that support their low-carbon development strategies while enhancing economic and energy security.
The initiative is expected to deliver 10 GW of new and additional renewable energy generation capacity by 2020 and mobilize the African potential to generate at least 300 GW by 2030.
AREI is an outcome of African leadership in Workstream II of the Durban Platform including their May 2014 proposal for a global renewable energy support programme.
The initiative has been endorsed by African Heads of State (AU Assembly and Committee of African Heads of State and Government on Climate Change) and Ministers of Environment (AMCEN) the G7 (Elmau Summit) the G20 (Energy Summit).
Speaking during the launch of the project at the Africa Pavillion in Paris, Akinwumi Adesina, the President of the African Development Bank (AfDB), one of the major sponsors of the initiative, said the institution will triple its financing to climate change initiatives by 2020 dedicating 40 percent of the Bank’s resources to such efforts.
He regretted that Africa is often referred to as a dark continent because majority of the residents have no access to electricity. “Africa has 640 million of its people who don’t have access to electricity. A total of 7 million Africans have no access to clean energy and majority use charcoal and kerosene. This always leads to deaths. We must stop this,” Adesina said.
He added, “The initiative is a game-changer as Africa loses 4 per cent of its GDP due to lack of clean energy. Sunshine should do more than just nourish our crops. It must light our homes. Our massive water resources should do more than water our farms, it should power our industries. Potential is important, but homes and industries cannot be powered by potential. Africa must unlock its renewable energy potentials.”
Judi Wakhungu, Kenya’s Environment Cabinet Secretary who represented President Uhuru Kenyatta at the meeting, welcomed the initiative, noting it is important as it will reduce carbon emission.
“Clean energy is important and its production and utilisation will reduce the carbon emission and save the environment. Kenya welcomes the AfDB initiative and we are ready to engage in massive solar and wind energy production to attain 100 per cent electricity reach for our people,” Wakhungu said.
Wilbur Ottichilo, Kenyan Member of Parliament for the Emuhaya Constituency who is part of the Kenyan delegation, said the project demonstrates that Africa is in charge of it is destiny.
“As a continent, we are demonstrating that we can take care of our problems and time for asking for favours is over. Let us use the resources we have to solve our problems,” he said.
Nkosazana Dlamini Zuma, Chairperson of the African Union Commission (AUC), applauded the initiative on renewable energy, terming it transformative.
“We need to light up Africa and practice smart agriculture. This will save the dwindling waters of our lakes and transform the lives of our women, who bear the brunt of climate change. We should invest more in technology and innovation so that we equip our youths with the necessary skills to transform our continent,” she said.
Carlos Lopes, Executive Secretary for the UN Economic Commission for Africa (ECA), supported the initiative.
“Affordable and renewable energy is critical for Africa. The continent does not need fossil fuel but low carbon power which should come from hydropower, biomass, marine, geothermal, wing, solar,” Lopes said.
He decried the low penetration of power on the continent saying this affects development.
“The annual production of 160 GW of power by the continent is not even half of Japan’s capacity. What Sub-Saharan Africa produces is less than what South Africa produces. Time to act is now to change the situation,” Lopes said.
President Thomas Boni Yayi of Benin said the new energy deal will promote food security. “We need energy to transform our agriculture. Let us not rely on the fluctuating rains but invest in new technology to grow our economies,” Boni Yayi said.
Mohamed Monem, who represented the President of AMCEN, Khaled Fahmy, who is also Egypt’s Minister for Environment, thanked the Governments of France and Germany for their support to the initiative. “The two governments have supported the programme and have been instrumental in its adoption. We appreciate them and now we must embark on the project and not look back,” Monem said.
Ibrahim Mayaki, Chief Executive Officer of the New Partnership for Africa's Development’s Planning and Coordinating Agency, and Tumusiime Rhoda Peace, AUC’s the Commissioner for Rural Economy and Agriculture, also supported the project, noting that it will save the lives of Africans who will be able to access clean energy.
The African Development Bank is working to put in place all necessary arrangements to host AREI Delivery Unit as well as serve as the Trustee as requested by the AREI Partners and ensure the immediate implementation of the initiative. It fits well with the Bank’s New Deal on Energy for Africa that has an ambitious target of universal access by 2025 (which entails 100% urban access and 95% rural access).
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African Union warms up for CFTA negotiations
As we approach the start of negotiations for the establishment of the Continental Free Trade Area (CFTA), the African Union (AU) held a series of three meetings on enhancing intra-African trade from the 23 to 27 November.
These meetings, organised with the Trade Law Center (Tralac) in Cape Town, South Africa, have examined the progress and prospects for regional integration in the context of the CFTA; the issue of modalities for services negotiations of the CFTA; as well as the monitoring of the implementation of the AU Action Plan for Boosting Intra African Trade (BIAT).
Adopted in 2012 by members of the AU at the 18th Ordinary Session of the Assembly of Heads of State and Government, the BIAT Action Plan aims to deepen African market integration and significantly increase the volume of trade that African countries undertake among themselves. The road map also envisages that the CFTA will be established by 2017, building upon and consolidating the regional free trade agreements of Regional Economic Communities (RECs).
One of the meetings held on 25 November specifically focused on the progress evaluation in regards to the implementation of the BIAT plan.
The meetings were attended by several departments of the AU Commission and representatives of regional economic communities (RECs) and some African member states.
“Beneficiaries of intra-African trade, i.e. the African people, need to see results sooner rather than later, so we are discussing how we can move forward step by step to realize the opportunities that will arise from greater intra-African trade,” said Treasure Maphanga, AUC Director for Trade and Industry.
These three meetings at the end of November are part of the broader framework of the Agenda 2063, adopted in January 2015 by the AU, which defines a strategy to build a prosperous and united Africa over the next 50 years. The paper entitled “The Africa We Want” reiterates some key objectives of the AU Plan of Action for the deepening of intra-African trade (BIAT). In particular, it advocates for the doubling of intra-African trade by 2022 and a swift establishment of the CFTA.
The CFTA on starting blocks
In June 2015, AU member states announced the launch of the negotiations to establish the CFTA, arousing great expectations throughout the African continent and beyond, but also some scepticism. In particular, the deadline for implementation of the CFTA, set for 2017 by the AU, has often been seen by some as too ambitious.
Nevertheless, the AU Commissioner for Trade and Industry, Fatima Acyl Haram, said in June that the organisation is fully aware of the challenges which may arise from the negotiation of such an agreement.
If it is successful, then the CFTA would be the largest free trade area in the world, comprising 54 States. According to the UN Economic Commission for Africa, its implementation could increase intra-African trade by 52 percent by 2022, or about US$35 billion.
On 5 November, the Continental Task Force (CTF) on the CFTA held a meeting in Abuja, Nigeria to consider documents in preparations of the negotiations. The meeting was organized by the Africa Union Commission in preparation for the commencement of the CFTA negotiations in December 2015. The CTF is established to coordinate actions between the AUC and the RECs and to ensure that the CFTA negotiations are conducted within the agreed timelines. During the meeting, participants focused on the rules of procedures of the negotiating forum, the modalities for tariff negotiations in services, as well as the establishment of technical groups in some areas.
“We need to think outside the box to envisage the way to achieve this mandate,” said Treasure Maphanga after the meeting. Urging participants to share best practices identified at the regional level, she also said, as has been often pointed out by the AU, that the experience gained in the framework of the Tripartite Free Trade Area has proved to be a great asset to the negotiations of the CFTA.
One of the three meetings held in Cape Town, South Africa at the end of November also considered, specifically, the issue of negotiating modalities in the field of services. The purpose of this meeting, which was held on 25 November, was to review the various options and potential modalities for the liberalisation of services, in order to make recommendations for the approach to negotiations. As part of the CFTA, it is expected that negotiations on goods and services will be conducted in a simultaneous manner, to enable mutual concessions between the two domains.
The conclusions from the meetings will be submitted in the course of 2016 to the Specialized Technical Committee on Trade, Industry and Mineral Resources of the AU for consideration in the formulation of the CFTA.
Private Sector
As part of a three-day conference co-organised with the Pan African Chamber of Commerce (PACCI) and the Seychelles Chamber of Commerce, the AU also initiated a dialogue with the private sector on the CFTA. The meeting, which was held on 12 November in Victoria, the Seychelles, enabled participants to share views, knowledge and experience with various private sector representatives.
According to the AU, the governance structure of the CFTA provides for the establishment of an African Business Council as a necessary platform for aggregating and articulating the views of the Private Sector in the continental policy formulation processes. This council is expected to collect, coordinate and present the views of the private sector.
Treasure Maphanga called on the private sector to partner with the AU Commission to carry out its mandate and to take ownership of the process for establishing the African Business Council.
Echoing Maphanga’s words, Peter Chisawillo, the President of the Chamber of Commerce, Industry and Agriculture of Tanzania, also stressed the fundamental role of the private sector in enhancing intra-African trade.
Some participants nonetheless had more nuanced views regarding the establishment of such an African Business Council. Seth Adjei Baah, President of the Pan African Chamber of Commerce, advised for example, that the establishment of the African Business Council should not weaken existing Private Sector organizations that are operating at national, regional and continental levels.
AU-ECOWAS consultation
Last month, the AU Commission also held discussions with the Economic Community of West African States (ECOWAS) with a view to developing regional strategies for engagement in the CFTA negotiations and to identify areas for capacity building at the national and regional levels.
At the meeting which was held on 3-4 November in Abuja, Nigeria, participants discussed the commercial potential of the CFTA, general principles, institutional arrangements, and technical issues related to the negotiation process, as well as the engagement of the private sector in these negotiations.
Ahmed Hamid, ECOWAS Commissioner for Trade, Customs and Free Movement, stressed the importance that the west African regional community attaches to the establishment of the CFTA, and highlighted some of the lessons that can be learned from the experience of ECOWAS in regional integration. He also suggested to attending member states that the mandate given to ECOWAS for the negotiation of the EPA negotiations be extended to the CFTA.
Some participants stressed the need to complement efforts to establish the CFTA with a set of actions geared towards enhancing intra-African trade within the context of the BIAT.
“There is no CFTA without BIAT and vice-versa. There is need to focus on ensuring that national productive capacities are enhanced taking advantage of regional and continental market access opportunities,” also said David Luke, Director of the African Trade Policy Centre (ATPC) of the UNECA.
The AU underlined for its part that a sole elimination of tariffs and other trade barriers would not be sufficient to increase intra-African trade.
“We must do more in terms of developing the productive capacities of our economies, implement trade facilitation measures, develop our infrastructure, and ensure reliable energy supply and skills availability,” said Treasure Maphanga.
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Crunch time in Geneva as trade negotiators prepare for WTO Ministerial
Less than two weeks remain before trade ministers begin their biennial conference in Nairobi, Kenya, with WTO members still deeply divided on specific deliverables and how to address the organisation’s future negotiating work, including the Doha Round.
The Nairobi ministerial conference is scheduled for 15-18 December, leaving little time remaining to sort out remaining differences in Geneva before officials board planes for the Kenyan capital.
With that timing in mind, members have spent the past six weeks putting forward a raft of textual proposals for the meeting’s outcome document, which they aim to make a ministerial declaration. The vast variety and competing priorities of such proposals has, however, reportedly proven extremely difficult to navigate, particularly as the ministerial draws ever nearer.
Various delegates say that the week ahead is set to be crucial in the negotiations, with meetings of the agriculture, rules, and development negotiating groups all scheduled between now and Friday.
Discussions at the WTO General Council this Monday, 30 November on the agenda item relating to the Doha negotiations – specifically, the report by Director-General Roberto Azevêdo in his capacity as chairman of the Trade Negotiations Committee – were suspended, with a report from the meeting indicating that members would revert to it “in due course” without specifying a date, though some sources suggested this could resume late this week.
Meanwhile, the WTO has released an overall programme outlining generally the timeline for the ministerial, which will formally kick off on the afternoon of 15 December and feature various plenary sessions and two accession ceremonies – for Afghanistan and Liberia – as well as the opening and closing events.
The chair of the conference is set to be Amina Mohamed, Kenyan Cabinet Secretary of the Ministry of Foreign Affairs and International Trade. The vice-chairs have also recently been named, with these set to be Alexander Mora, Costa Rica’s Minister for Foreign Trade; Carlo Calenda, Italy’s Vice Minister for Economic Development; and Gregory Domingo, Philippine Secretary of Trade and Industry.
Draft declaration
On Friday 27 November, the three WTO ambassadors acting as “facilitators” in drafting the ministerial declaration – Gabriel Duque of Colombia, Harald Neple of Norway, and Stephen Karau of Kenya – released a draft consolidated document for members to review.
The document was prepared under the facilitators’ own responsibility, with a clarification in the beginning that it is without prejudice to either the final outcome document or individual member stances. Speaking at the 27 November meeting, Azevêdo reportedly told members to take time to consider the content of the document, with a view to reporting back on Wednesday 2 December.
Members were set to meet on Wednesday afternoon in the “Room W” format – heads of delegation plus one – to continue work on the draft declaration, sources said, with many noting that the next stage of discussions on the ministerial declaration are set to be difficult.
Twenty years in
Split into a preamble and three main parts, the 5-page consolidated draft document’s sections address the multilateral trading system in the context of the global trade body’s 20th anniversary, any specific Nairobi deliverables, and the WTO’s future work, respectively. The document has been compiled following various submissions tabled in recent weeks by members both individually and jointly, addressing a wide range of issues.
The preamble section includes reaffirmations of both the “centrality of development” in the global trade body’s work, as well as the organisation’s role in global trade governance and commitment to the objective of sustainable development.
The preamble also features a pledge to “make the multilateral trading system responsive to existing challenges so as to provide a strong impetus to inclusive prosperity, welfare, and development, especially in view of the needs of our weaker and vulnerable members, in particular least developed countries (LDCs).”
Given that the Nairobi ministerial coincides with the organisation’s 20-year anniversary, the document notes under the first section a series of “achievements and challenges” that have been seen to date.
Regarding achievements, the document refers to both the importance of the organisation’s regular bodies in advancing its work, particularly trade monitoring, as well as its achievements in dispute settlement, while acknowledging in the latter some of the strains that system has faced in terms of caseload number and complexity.
However, when referring to the negotiating pillar of the WTO’s work, the draft document is less optimistic, noting “some progress” in areas such as the adoption of the Protocol Amending the TRIPS Agreement and the Trade Facilitation Agreement. However, “we note with regret that much less progress has been made in central elements of the WTO’s negotiating agenda, in particular in agriculture,” the document says in its 11th paragraph.
Deliverables for Nairobi
Under Part 2, the document includes bracketed text for whichever decisions may be adopted at the ministerial, referring specifically to non-violation and situation complaints under the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, the WTO’s work programme on e-commerce, and the work programme on small economies.
In italics and in brackets is a placeholder for any other decision to be inserted into that section of the document.
These may include a possible deal on export competition in agriculture, as well as select issues of relevance to developing and least developed countries, as well as some outcomes from the “rules” negotiations.
However, sources say that divisions still remain on various key components within these areas, leaving it unclear what their outcome may be.
Regarding agriculture, for example, the chair of those negotiations – New Zealand Ambassador Vangelis Vitalis – convened small group consultations this week on both public stockholding and the special safeguard mechanism (SSM), with those meetings held on Monday and Tuesday respectively.
These meetings brought together around 30 or so countries from a cross-section of WTO members.
“The discussion was pretty pragmatic,” one developing country delegate commented. “Time is short,” the official continued, expressing confidence that there will be an outcome at the ministerial. Others noted again the divergence in positions and the major decisions members will need to take if they wish to ensure a substantive outcome.
Other agriculture developments this week include a new Tunisian proposal on agricultural export competition, as well as a verbal proposal by the US on export credits. Sources indicated that additional meetings on agriculture over the coming weekend are a possibility.
Doha, future work
Given the difficult nature of how exactly to address the future of the Doha Round and how to address new issues, the consolidated facilitators’ draft makes clear that it does not aim to tackle these “most contentious issues identified by members.” Another area that they specifically did not aim to address in the document, they said, involved “security exceptions,” given the deep divides in that area.
Rather, the third and final section of the facilitators’ consolidated draft includes a reference to the advances made in the Doha talks so far, together with regret that agreements in all negotiating areas have not been reached. Addressing agriculture reform will be addressed as a priority, it says.
Other paragraphs in that section feature a mention of “principles of Special and Differential Treatment and Less Than Full Reciprocity for developing and least-developed country members,” saying that these must play “integral parts” in the organisation’s future work, as well as referring to the importance of addressing the needs of LDCs, small, vulnerable economies, and the particular issues for recently acceded members.
Lastly, it includes language regarding regional trade deals, reaffirming that these should “remain complementary to, not a substitute for, the multilateral trading system.” The document also refers to building on the WTO’s relevant committee in this area as well as plans to conduct a study on the systemic implications of such agreements.
Proposed insertions
Since the release of the facilitators’ document on 27 November, some members have already tabled proposals for potential insertions or modifications to the text, particularly regarding the language on Doha and new issues.
One of these proposals was made jointly by China, Ecuador, India, Indonesia, South Africa, and Venezuela, who asked for the insertion of a paragraph in the preamble reaffirming the Doha Development Agenda (DDA) and decisions and declarations adopted both in the Qatari capital 14 years ago and at subsequent ministerial meetings.
These members have also asked that the same paragraph be inserted in Part 3, on future work. Should these paragraphs be added in brackets, they said, the 23rd paragraph in the facilitators’ document – which welcomes any Doha-related advances and expresses regret at the failure to reach outcomes in all negotiating areas – should also be bracketed.
Paragraph 23 specifically reads as follows: “We welcome the advances made in the Doha Development Agenda. We regret that it has not been possible to reach agreement on all areas of the negotiations, including Agriculture, NAMA, Services, Rules, including fisheries subsidies, and TRIPS. In particular, we note the importance of agriculture to many WTO Members, including LDCs. We will therefore address all aspects of agriculture reform as a matter of priority.”
The African Group, for its part, has also tabled its own suggested addition to the preamble and Part 3, which like the proposal by China and others includes reaffirming the DDA and all ministerial decisions and declarations since the launch of the Round. It also refers to the decision adopted by the General Council on 1 August 2004, which relates to the Doha agenda work programme.
Alternatives to paragraph 23 of the facilitators’ text have also been suggested by Korea, which features three paragraphs which would instead note the difficulties in reconciling members’ disagreements on Doha. These paragraphs also would instruct officials “to continue deliberations” on next steps in addressing the unresolved issues from the Round, in order to decide on a “way forward” by the end of next year.
It also features language on addressing “any trade-related issues deemed necessary in order to stay relevant and in keeping with the evolution of the global economy,” while noting that these could be pursued “at least on an exploratory basis,” so long as they do not get in the way of addressing current, unresolved issues.
Questions of time
Whether and how these various issues may resolve themselves remains an open question, with delegates again referring to the limited time remaining and the nature of the current disagreements.
“Anything could happen at the moment,” said one developing country negotiator, noting the seriousness of the situation. “There’s still huge divergence,” the trade source said.
“I wouldn’t be so worried if we had more time,” a developed country delegate said.
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Technology can deliver inclusive and sustainable industrial development: Industrial Development Report 2016
The United Nations Industrial Development Organization (UNIDO) launched its flagship publication, the Industrial Development Report (IDR) 2016, during the Organization’s General Conference on 2 December 2015.
The report, titled “The role of technology and innovation in inclusive and sustainable industrial development”, addresses the challenging question of what conditions are required for structural transformation, driven by technological change, in order to drive sustained growth and inclusiveness, while avoiding environmental degradation.
Technological change is recognized as one of the main drivers of long-term growth. In the coming decades, radical innovations such as the mobile internet, the Internet of Things and cloud computing are likely to revolutionize production processes and enhance living standards, particularly in developing countries. However, while there is clear evidence that technological change contributes significantly to the prosperity of nations, the debate about the underlying factors deterring countries from promoting technology and innovation more intensively continues. Although technology is linked to sustainable growth, there has been uncertainty about whether it can simultaneously create social inclusiveness and environmental sustainability.
The main finding of the IDR 2016 is that technology can simultaneously serve all three dimensions of sustainability – economic, social and environmental.
Rapid inclusive and sustainable industrialization can be achieved, provided that policymakers resolutely facilitate and steer the industrialization process, on the basis of sound policies and by avoiding the mistakes other countries have made in the past.
Writing in the foreword to the report, UNIDO Director General, LI Yong, said: “I am particularly pleased that the Industrial Development Report 2016 emphasizes the critical need for international cooperation to promote technological change and achieve inclusive and sustainable industrialization, and that it reaffirms the commitment of my Organization to fulfil its unique mandate in support of this effort.”
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New COMESA Industrialization policy in focus as Intergovernmental Committee meetings begin
The 35th meeting of the COMESA Intergovernmental Committee opened in Lusaka on 3 December 2015 with a call on Member States to address bottlenecks that are hindering intra-regional trade, such as supply side constraints and non-tariff barriers (NTBs).
The meeting brings together Permanent/Principal Secretaries from the 19 Member States. It is also attended by representatives of the development partners and heads of COMESA semi-autonomous institutions.
The IC meeting is one of the key COMESA policy organs and will take three days reviewing the status of implementation of all approved COMESA priority programmes in the Member States and the provisions of the COMESA Treaty.
Deputy Minister of Commerce, Trade and Industry of Zambia, Hon. Raymond Mpundu, opened the meeting held at the COMESA Secretariat in Lusaka.
In his statement, he said that intra-regional trade has remained low partly due to the similar products that compete for the same market within the Member States. He observed that the COMESA Industrial Policy which has now been finalized holds the key to unlocking the trade potential through harnessing value addition.
“The policy has approaches which focus on value addition of commodities as well as skills based industrialization, among others,” he said. “Value addition will address this challenge while empowering our small enterprises leading to diversification of intra-COMESA exports, which in turn will spur intra-regional investment and job creation.”
The development of the COMESA Industrial Policy was in compliance with the decision of the 33rd Council of Ministers that met in Addis Ababa in March 2015.
The Minister acknowledged the challenges that Member States were facing in implementing some of the agreed COMESA programmes and in particular those that require policy and regulatory framework amendments such as the Customs Union. Among them, the loss of revenue, uncompetitiveness of industry or low levels of industrialization.
He thanked COMESA-EU funded programme of Regional Integration Support Mechanism (RISM) which provides budget and project support to Member States in addition to the Technical Cooperation Facility (TCF) under European Development Fund (EDF 11).
“This has contributed towards providing mitigation measures to assist Member States to implement their regional obligations by addressing some of these challenges,” Hon Mpundu noted.
In his address, Secretary General Sindiso Ngwenya informed the meeting that the total support to Member States under RISM and the Technical Cooperation Facility for 2015 was 12 million Euros.
“This brings the total disbursement from 2012 to 2015 to 62 million Euros,” said Mr Ngwenya adding that COMESA achievements would not have been possible without the support and cooperation from cooperating partners and the regional economic communities under the African Union.
The Secretary General observed that despite the excitement generated by academicians, economic commentators and political leaders a few years ago about "Africa Rising", the reality on the ground was different.
“The Africa Rising narrative described appearances and not the substance of our economies that are characterized by wrong specialization in the global economy of producing and exporting low value primary commodities with little or no processing as evidence by the abysmally low percentage of the contribution of industry to the national and regional gross domestic product,” he said.
Mr Ngwenya said the answer to this challenge was in part, the implementation of the COMESA Industrial policy and other provisions of the COMESA Treaty on infrastructure, energy, agriculture, Natural resource management and environment, science and technology and human resource development.
The report of the Committee will be presented to the COMESA Council of Ministers that will take place Monday and Tuesday, 7-8 December 2015 in Lusaka, Zambia.
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An African Master Plan: The solution to Africa’s transport challenges
The African Development Bank Transport Forum (ATF) 2015 ended on November 27, 2015, with the AfDB reiterating its support for transport development to ensure economic growth on the continent.
Speaking at the closing ceremony attended by several African Transport Ministers, Solomon Asamoah, the Bank’s Vice-President for Infrastructure, Private Sector and Regional Integration, emphasized that Africa’s transport challenges needed to be addressed urgently for the continent to become competitive.
“The Bank is determined to work with [African] countries and it is re-emphasizing its priorities to ensure that transport plays a catalytic role to promote Africa’s participation in agribusiness and global manufacturing value chains, facilitate regional integration and provide opportunities for social inclusiveness,” said Asamoah.
He underlined the need for an integrated approach to the development of transport infrastructure systems within countries. This was supported by Angela Cassell-Bush, Liberia’s Minister of Transport, who called for an African Master Plan to help build a road network connecting Africa. “We need to review our various regulatory frameworks and come up with one for the whole continent. It will help to facilitate movement of people and boost trade,” she noted.
The importance of such a strategy in addressing maintenance of road infrastructure was discussed at length. “We spend huge sums of money establishing infrastructure, and run them down without maintaining them. In some places some roads do not even last for three years. There is need for a cultural paradigm shift in how we manage our infrastructure,” said Asuman Kiyingi, the State Minister of Works in Uganda.
The damage on Africa’s road infrastructure was attributed to overloading of heavy commercial vehicles. This, coupled with the high maintenance costs, makes the situation worse, according to Mamadou Diallo, a Chief Inspector in the Ministry of Transport and Infrastructure in Mali. He said the proposed road network master plan should address the problem.
Investing in public transport was cited as key to tackling congestion in cities. Alexis Nzahabwanimana, Rwanda’s Minister of State in Charge of Transport, said development of public transport would avoid many vehicles from entering the city, at the same time “increasing mobility of citizens.” This, he added, would reduce vehicle emissions, which are a health hazard.
Liberia’s Cassell-Bush underscored the importance of promoting green transport, saying this would ensure efficient and use of clean fuel, with health benefits, but warned of policy reforms. “We must renew our policies and see how to prioritize green transport,” she observed.
Africa has an aging vehicle fleet, with most vehicle years being 16-20 years, contributing to emission of dangerous gases, according to United Nations Environment Programme. Air pollution, most of it occurring from the transport sector, is said to be the cause of 176,000 deaths per year in Africa, states the World Health Organization.
The ATF 2015 is the first of its kind. It brought together high level government representatives, experts, development partners, international organisations, Private Sector, Academia, NGOs, among others, to deliberate on the theme “Sustainable Transport for an Integrated Africa”.