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Aid for Trade 10 years on: Keeping it effective
Ten years ago, the sixth WTO Ministerial Conference invited the Director General to set up a task force for operationalising aid for trade with the aim of generating support for developing countries, particularly least developed countries, to build the supply-side capacity and trade-related infrastructure they need to implement and benefit from WTO Agreements and more broadly to expand their trade.
The task force recommended using existing mechanisms for identifying and prioritising trade-related capacity constraints around which donors should align their support. The Paris Declaration on Aid Effectiveness was acknowledged as the guiding principles for the Initiative. These principles have created a strong partnership between the trade and development communities around a shared agenda with clear objectives, reciprocal commitments based on transparency and mutual accountability.
The WTO Global Reviews of Aid for Trade, together with the joint OECD/WTO Aid for Trade at a Glance monitoring reports, have shown that the Initiative has raised awarness among developing countries and donor agencies about the positive role that trade can play in promoting economic growth and development. Moreover, developing countries, notably the least developed, are getting better at articulating, mainstreaming and communicating their trade-related objectives and strategies.
Aid for trade is effective at both the micro and macro level according to a broad range of trade and development literature. More specifically, OECD research found that one dollar extra invested in aid for trade generates nearly eight additional dollars of exports from all developing countries – and twenty dollars for the poorest countries. Results, however, may vary considerably depending on the type of aid-for-trade intervention, the sector at which the support is directed, the income level, and the geographic region of the recipient country.
Aid-for-trade case stories buttress this evidence. The sheer quantity of activities described in these case stories suggest that aid for trade is becoming central to development strategies and has taken root across a wide spectrum of countries and activities. Although not always easy to attribute cause and effect, the stories show tangible evidence of how aid for trade is helping countries build the human, institutional and infrastructural capacities for turning trade opportunities into trade flow and helping men and women make a more decent living.
Building trade-capacities is an ongoing process. The continued need for the Aid for Trade Initiative is obvious; tackling trade-related binding constraints requires continues efforts in a globalising economy where connectivity is key for success. This is especially true with trade growing at a slower pace than before. Despite the significant achievements of the Initiative over the past 10 years, challenges remain in keeping it relevant.
The role of the private sector should be strengthened. Much progress has already been made with involving the private sector, but engagement could be intensified further by creating shared multi-stakeholder value and by scaling up and systematically including the private sector in the different stages of the aid-for-trade project cycle. Such engagement should, however, respect multilateral agreements which discipline the potential distortion of trade flows with aid money.
Engage with the providers of South-South trade related co-operation who are substantial source assistance in Asia, Latin America, and especially in Africa. Although some are transparent about their support, increased comparability and co-operation with DAC donors would help reduce institutional and human capacity constraints at the local level as well as facilitate co-ordination among the different providers of support for trade. This would also help in creating a level playing field among the different providers of trade-related assistance.
Enhance effectiveness through regional programmes. Deepening economic integration via regional co-operation is a key priority in the reform strategies of most developing economies. It is also actively promoted by donors, who collectively committed USD 3.1 billion to regional priorities in 2013. These programmes can be made more effective by involving an honest broker to help find common ground among countries, offering financial incentives, building human and institutional capacities, and harmonising regulations.
Experiment with new forms of aid delivery to enhance mutual accountability and provide incentives for more and better aid for trade. Focussing aid-for-trade programmes on quantifiable targets, would allow for the experimenting with results-focussed approaches, such as budget support, or payment for performance.
Focus on connectivity and trade costs to provide an operational focal point for an action oriented agenda among a broad collation of stakeholders, including the providers of South-South cooperation and the private sector. The advantages of such targets are also that they are neutral in the sense of benefiting not just exporters, but also importers and households.
Expand the scope to sustainable investment. The initial emphasis should be on trade in services, with a focus on those sectors that are central to promoting sustainable development, such as agriculture, energy and transport. Donor support in this area could tackle a range of issues such as transparency (i.e. aid for investment facilitation).
Promote green growth. Aid for trade should support developing countries in moving to sustainable agriculture, building climate-resilient infrastructure, strengthening the supply chain of low-carbon technologies and environmental goods and services, and more generally helping them with achieving green growth.
Play a catalytic role in supporting the SDG. The SDGs highlight that “(…) increasing aid-for-trade support for developing countries, in particular the least developed (…)” would help to “(…) promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.”
In response to the changing nature of the world economy, its rising complexity, its shifting trade and investment patterns, new approaches are required to better understand the trade-offs and complementarities between different policy objectives and deal with these interlinkages. In the face of the sluggish trade growth since the 2000s, there is considerable scope to enhance the international division of labour by further integrating countries that have heretofore remained marginally engaged in trade in general and in regional and global value chains in particular. The Nairobi WTO Ministerial Conference can provide a strong impetus to these efforts by agreeing to focus the Aid for Trade Initiative on improving connectivity, boosting sustainable investment, promoting green growth and, thus, contribute to the delivery of the SDGs.
This document is submitted for DISCUSSION under Item 7 of the Draft Annotated Development Assistance Committee (DAC) Agenda for the Meeting on 9 November 2015. The paper will be published under the joint responsibility of the OECD and WTO Secretariats in time for the Tenth WTO Ministerial Conference, which will take place in Nairobi, Kenya from 15-18 December 2015.
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EU: Nigeria’s economic policies violating ECOWAS laws
The European Union on Tuesday stated that many of Nigeria’s policies in operation contradict the basic rules of the Economic Community of West African States (ECOWAS) trade operations in the sub-region.
The EU Ambassador and Head of EU delegation to Nigeria and ECOWAS, Michel Arrion, made the statement while announcing the fourth EU-Nigeria Business Forum with the theme: ‘Unlocking Opportunities for Diversification.’ The EU envoy, while explaining Nigeria’s disregard for ECOWAS rules, noted that in January 2015, a new Common External Tariff (CET) was enforced by ECOWAS giving 14 months for member states to comply, but stressed that in Nigeria, it is still business as usual in clear disregard for agreements and conventions of the sub-regional umbrella body.
Arrion who stressed the importance of the EU-Nigeria business forum which will hold in Lagos from November 5 to 7 for participants from both the pubic and private sectors, however noted that the EU has no offensive agenda of hidden conspiracy against Nigeria and other countries in the region.
He stressed that all the EU and its mission in Nigeria and West Africa was interested in was the advancement of the sub-region as well as the enhancement of the competitiveness of its various economic segments.
“Nigeria is maintaining import bans against ECOWAS. You can do this outside ECOWAS but not within. You are part of the same community and bound by some rules relating to free movement of goods and people. We have no offensive agenda for Nigeria because we believe that Nigeria and ECOWAS are very important places where European or other non-European businesses could invest because there is enough room for investment,” he said.
Arrion assured Nigeria that the EU would not invade the West African market with products that could compete with domestic products of what Nigeria and other countries in the region would be producing, pointing out that the EU has removed all its export subsidies to the West African market.
He added that the forthcoming forum would together about business leaders and policy makers from the European Union and Nigeria to discuss business opportunities and impediments to investments.
“The forum will aim to increase domestic and foreign investments particularly in agribusiness, in line with Nigeria government’s diversification efforts,” he added.
Meanwhile, Arrion also stated that a €6.5 billion for every four years till 2035 has been agreed upon by the EU to provide financial trade related development assistance for Nigeria’s growth and development.
He explained that the move was to demonstrate the Union’s strong belief and confidence in the Nigerian market.
According to him, the EU will be making strong commitments in terms of financial development assistance and the “EU with its member states have all agreed to provide a minimum of €6.5 billion of trade development assistance every five years till 2035. Every five years, we are committed to giving grants, development assistance. EU and the 28 member states have agreed to give a minimum of €6.5 billion for every five years. In the last five years it was €8.5 billion. We are very comfortable to provide this development assistance.”
He further stated that since 2012, the EU-Nigeria business forum, a collaborative effort of the EU and its member states in Nigeria, has served as a platform for private sector participants to gather essential market information, identify business opportunities and connect with key players.
He added that the volume of trade between Nigeria and EU stood at €36.4 in 2013, accounting for 29.6 per cent of Nigeria’s total trade the same year, pointing out that the forum will deepen understanding of the role that the Economic Partnership Agreement (EPA) can play in supporting the diversification of Nigeria’s economy, strengthen EU-Nigeria business relations through identification of opportunities in agribusiness and forging partnerships.
He said EU will be making strong commitments in terms of financial development assistance, saying that the EU and its member states have all agreed to provide a minimum of €6.5 billion of trade development assistance every five years till 2035.
“Every five years, we are committed to give grants, development assistance. EU and the 28 member states have agreed to give a minimum of €6.5 billion for every five years. In the last five years it was €8.5 billion. We are very comfortable to provide this development assistance,” he said.
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Economic integration in East Africa will prove challenging
Several recent trade wars between Kenya, Tanzania and Uganda emphasize some of the key challenges faced by the East African Community for a successful economic integration.
The drive for political and economic integration within East Africa has been a work in progress ever since the East African Community (EAC) was revived in 1999.
The community – consisting of Kenya, Tanzania, Uganda, Rwanda and Burundi – made important steps towards economic integration with removal of internal customs tariffs in 2010, and further with the 2015 establishment of a common external tariff (CET) for imports into the member countries.
But several contentious violations of customs rules have over the last months shown how domestic pressure, coupled with underfunded and slow bureaucracies, presents major challenges for further integration
Sugar, beef and rice
The problems began when the region experienced a shortage of sugar in 2011, prompting the EAC to introduce a licensing system to allow for import quotas from outside of the region at low tariffs.
The Kenyan sugar industry, a large and significant political group domestically, soon accused Ugandan traders of repackaging sugar bought cheaply from outside the region and selling it in Kenya as Ugandan products. This circumvention of EAC Customs Union protocol, which provides for free movement of goods between the member states, lead to an import ban on Ugandan sugar in 2012.
In a tit-for-tat reprisal the government in Kampala enacted a ban on Kenyan beef and beef products, and the trade war was just recently settled in a high-level meeting between presidents Kenyatta and Museveni.
Soon Uganda’s attention turned on Tanzanian rice, a sector where Tanzania in recent years has made efforts to increase domestic production, leading to a surplus.
Amidst allegations that Tanzanian traders had repackaged and relabelled rice bought cheaply from Asia, Uganda added an 18% value added tax (VAT) on rice imports from Tanzania. As Ugandan rice and cereal products are exempt from VAT, Dar Es Salaam accused them of violating of the Customs Union rules.
Ugandan officials argued that East African countries has not yet harmonized domestic tax laws and that this move was necessary to protect local rice farmers from damaging competition.
Old habits die hard
These type of disagreements are not new to the region and also extend to other areas such as visa rules, tuition rate for regional students and bureaucratic requirements to conduct business or invest within the region.
The EAC has shown a willingness to advance the agenda of regional integration, both in rhetoric and in practice, for example as Global Risk Insights have earlier covered the efforts towards establishing a single currency in East Africa. The recent protectionist actions – in blatant violations of the newly accepted rules – questions whether the process of integration can continue without both domestic changes and a change in government practices.
Part of the explanation is found in the political systems in the region. Despite the appearance of stability in Rwanda, and to a lesser extent in Uganda, the member states are generally characterized by moderate levels of instability, which are frequently manifested around election time.
There will soon be elections in both Uganda and Tanzania, making the government particularly susceptible for pressure from domestic groups, and farmers are too important to be ignored in the largely agrarian economies.
Another challenge is the overall poor performance of the agricultural industries, which suffers from structural inefficiencies that make them unable to compete with cheaper products abroad.
Better regulatory mechanisms needed
The EAC countries have made efforts for industrial developments in different sectors, increasing their willingness to fall back on protectionist tendencies when they feel these efforts are being undermined.
The common market framework of the EAC is however intended to strengthen industrial development in the region and should not be regarded as an obstacle for growth. Better regulatory mechanisms are needed in order to capitalize on this potential, both to cut red tape and allow for easier trade within the region, but also to enforce existing regulations and prevent traders from circumventing the system.
For the success of regional integration in a long-term perspective, the member states would also need to show a stronger commitment to their shared goals – and established framework – even when faced with substantial pressure from sensitive domestic groups.
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Fight against global illicit economy turns dark as size and growth remain unknown
The value of the global illicit economy is regularly placed at over $1 trillion. However, data is often out of date, sometimes by more than 10 years.
The illicit economy is a giant, global and growing problem, a new paper by the World Economic Forum Meta-Council on the Illicit Economy shows. But as the widely varying estimates of its cost show, the illicit economy needs to be measured before it can be combatted.
“You need to know your adversary in order to beat it, and sadly there is lack of clarity around the threat of the illicit economy,” said Jean-Luc Vez, Head of Public Security Policy and Security Affairs, World Economic Forum. “Measuring the illicit economy in a more coordinated and synchronized way thus is the first step global governments and business should take.”
The value of the illicit economy is estimated to be upwards of $1 trillion. Estimates on counterfeiting, one of its largest components, vary from $250 billion (similar to Ireland’s GDP) to $1.77 trillion (similar to Canada’s GDP). Compounding this variability is the fact that almost all estimates are out of date: most often by five or six years but sometimes by more than a decade.
Criminal organizations have exploited the gaps in our governance capacity and policy in addressing the illicit economy, the paper further indicates. Often more sophisticated and technologically advanced, they are winning the technological arms race against governments in many economies, especially in the developing world.
“The proliferation of illicit activities shows no signs of slowing. It grows particularly in regions where there is lack of governance and social structure. Hence, in an era where several regions in the world are vulnerable and politically unstable, efforts to address these underlying issues must be made,” said Adam Blackwell, Chair of the Meta-Council on the Illicit Economy.
The Meta-Council has identified several key areas where all sectors can play a role in curtailing the damage of the illicit economy:
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To develop a common or harmonized database of knowledge and information exchange
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Businesses to employ technologies that allow an appropriate level of information to be shared with the public and law enforcement agencies
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Better coordination across organizations in joint operational initiatives
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Aligning fragmented governance with new concepts around the role of business and individuals
In addition, the Meta-Council notes in its paper that technology has been effective in fighting crime in a number of areas. Big data has been used, for example to uncover sex traffickers in the United States. Combined with satellite imaging, this has had an impact on curbing illegal deforestation. Satellites, meanwhile, are used to tackle illegal fishing while drones have been employed in the war against poaching. DNA could soon be brought to bear in this fight, too, with forensic laboratories able to link stolen ivory to specific animals.
The Co-Chairs of the Summit on the Global Agenda 2015 are Sultan Bin Saeed AlMansoori, Minister of Economy of the United Arab Emirates and Ali Majed Al Mansoori, Chairman, Department of Economic Development, Abu Dhabi.
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tralac’s Daily News selection: 27 October 2015
The selection: Tuesday, 27 October
African think tanks asked to step up (ACBF)
Speaking at the opening of the 5th Consultative Forum of the ACBF Policy Institutes Committee held in Kigali from 21-23 October, Dr Munthali said the current global strategic transitioning from the Millennium Development Goals to the Sustainable Development Goals and the implementation by the African Union of its Agenda 2063 called for the Foundation and African think tanks to play the unique and very determinant function of providing public policy research, analysis and advice. The Foundation has conducted studies on the “Internal and external risks associated with the implementation of AU Agenda 2063” and the “Agenda 2063 Capacity Needs Assessment and its Capacity Development Plan”. “Both studies, which will be soon published, are critical in successful implementation of the continental agenda,” said Dr Munthali.
World losing up to R27trn in illicit economy (WEF)
Counterfeiting and piracy will cost the global economy about R24.17trn in 2015, which is nearly 10% of the global trade in merchandise. That is according to a new paper by the WEF Meta-Council on the Illicit Economy, released at the WEF Summit on the Global Agenda in Abu Dhabi on Monday. Eliminating the illicit trade in tobacco could generate annual revenues of up to R423.48bn for governments, according to the World Health Organisation. The cost of illicit trade to human life is even more striking, the paper shows.
World Trade Report 2015 (WTO)
From the conclusion: The TFA will help developing countries attract more foreign direct investment. Companies making foreign investment decisions typically take the efficiency of trade procedures into account. Implementation of the TFA could be interpreted by foreign investors as a signal of improvement in the overall investment climate, which would induce inward FDI flows even in those sectors in the domestic economy that are not highly dependent on trade. This report has found a positive and statistically significant link between trade facilitation and inward FDI flows using a dataset covering 141 countries over a 10-year period (2004-13).
Many LDCs are dependent on customs duties and other taxes collected at the border for their revenues, which can constitute up to 45% of LDCs’ government revenues. Inefficient trade procedures reduce the volume of goods passing through customs and result in foregone revenues, which, in the cases of a number of African countries, are equivalent to 5% of their GDP. Furthermore, there is evidence to show that the likelihood of engaging in fraudulent practices at the border is higher the longer the time needed to clear goods. By simplifying trade procedures and reducing the time to move goods across borders, the TFA will increase the volume of goods flowing through customs, reduce the scope for corruption and increase the amount of revenue collected.
WTO Committee on Technical Barriers to Trade: request for observer status by African Organization for Standardization, Inter-Government Authority on Development
Third India-Africa Forum Summit: statement by External Affairs Minister Sushma Swaraj (External Affairs)
Our cooperation is multi-faceted and growing. The India-Africa Forum Summits are making immense contribution in this regard. I believe there would be merit in putting in place a regular review mechanism that can evaluate the progress of implementation of the various cooperation initiatives between India and Africa at the bilateral, regional and pan-African levels. Our Senior Officials have met yesterday to finalise the two outcome documents – a draft Political Declaration and a draft Framework of Strategic Cooperation. I understand that the Outcome documents have been discussed in detail by the two sides and an understanding agreed upon. You may like to convey any comments that you may have on the two documents, so that we can forward the finalised texts to our leaders for adoption.
Out tomorrow, in Delhi: Africa-India Facts and Figures 2015
Foreign Affairs CS Amina Mohammed petitions India to review credit terms (The Standard), Exim Bank co-promotes project development firm in Africa (Economic Times), India, Africa can become engines of growth for world: Jaitley (WebIndia)
Investment Policy Monitor (UNCTAD)
UNCTAD's latest Investment Policy Monitor shows that, as in previous review periods, the vast majority of new investment policy measures aimed at creating more favourable investment conditions. In total, 41 measures were taken by 25 countries. Regarding international investment policies, the Monitor finds that eleven countries concluded seven new international investment agreements. These include four bilateral investment treaties and three "other IIAs". Negotiations were concluded for seven IIAs, including the mega-regional Trans-Pacific Partnership agreement, and negotiations are ongoing for numerous other investment treaties.
Brazil’s bilateral investment treaties: more than a new investment treaty model? (CCSI)
The way in which Brazil sees its overall FDI policy is, in fact, quite different from the usual narrative of the international investment regime, which describes BITs as a means to advance the rule of law and the respect of property rights in developing countries. The Brazilian agenda focuses instead on consolidating economic relations with its partners and establishing political mechanisms to promote FDI. A look at the Brazilian treaties confirms that, while FDI protection is a key part of these deals, they are more ambitious than the United States and European ones when it comes to promoting FDI and preventing disputes.
Sahel and West Africa Week 2015: 26-30 October (OECD)
Urbanisation is changing the dynamics of food security: In 1950, West Africa had 152 cities and major towns; today it has more than 12 times that number, or 1 947. These include Sub-Saharan Africa’s largest city, Lagos, with 10.6 million inhabitants. The spatial dynamics that accompany urbanisation such as the geographic distribution of towns, their size, their number and the distances between them, are increasingly shaping food and nutritional security outcomes. Rural areas that are closer and better connected to cities and towns are more diversified and have more productive local economies. Analysing the intensification of rural-urban linkages is crucial to informing policy on food security in West Africa.
NLC seeks relocation of OTUWA Secretariat to Nigeria (Nigerian Mirror)
Nigeria has called for the relocation of the Secretariat of the Organisation of Trade Unions of West Africa to Nigeria with a view to making the body more responsive to issues affecting industrial relations at the continental level. The NLC president, Comrade Ayuba Wabba, underscored the significance of the revival of OTUWA, insisting that it would not only lend credence to regional integration, but also ensure the unification of the various trade unions in the African continent.
Council conclusions on the EU Horn of Africa Regional Action Plan 2015-2020 (Europa)
The Council underlines that in line with the objectives set out in the Strategic Framework, and taking into account the new challenges in the region, the EU should give priority to the following five groups of actions in the period 2015-2020, namely: regional security and stability, migration and forced displacement, counter-radicalisation and violent extremism , youth and employment, and human rights, rule of law and democratic governance.
Financing for innovation: what can be done for African SMEs? (AfDB)
Financing innovative small and medium sized firms all around the globe is a challenge. In Africa, this challenge becomes increasingly pressing as demand by innovative SMEs is on the rise. Yet for African SMEs, financing challenges are compounded by several issues that have both supply and demand roots. On the demand side, many firms are unable to find adequate ways to promote their projects and obtain financing. On the supply side, beyond the generalised lack of breadth and depth of financial markets, financiers face many uncertainties and market failures that prevent them from engaging in financing. With this in mind, some ways forward can be recommended:
Angola: Government plans to reorganise the oil sector (MacauHub)
The President of the Republic of Angola on Friday set up a commission to study the readjustment of the organisation of the oil sector to develop an integrated and effective strategy to improve efficiency of the Angolan oil sector. Alongside the creation of the commission public company Sonangol will be restructured, as announced on 15 October by the government. Crude oil export revenues of Angolan oil company Sonangol fell 44% in September over the same month of 2014.
China’s new credit facilities increase total received by Angola to US$20bn (MacauHub)
Sovereign wealth funds in the new era of oil (IMF)
As a result of the oil price plunge, the major oil-exporting countries are facing budget deficits for the first time in years. The growth in the assets of their sovereign wealth funds, which were rising at a rapid rate until recently, is now slowing; some have started drawing on their buffers. In the short run, this phenomenon is not cause for alarm. Most oil exporters have enough buffers to withstand a temporary drop in oil prices. But what will happen if low oil prices persist, and how will policymakers react?
Antoinette Sayeh: 'Slower growth in Africa a policy challenge' (Business Day),
Africa's upshot: How the AfDB and the private sector can mobilize growth (Devex)
Zimbabwe: $1,2bn Dangote projects licensed (The Herald)
The Zimbabwe Investment Authority has issued the Dangote Group with licences for three projects worth $1,2bn paving way for Nigerian billionaire Mr Aliko Dangote to start implementing business deals agreed with Government earlier this year. The three projects are a cement manufacturing plant, a coal mining venture and an energy or power plant using coal off take production.
Tomorrow, in Harare: launch of the National Competitiveness Report (NewsDay)
The National Economic Consultative Forum will launch a National Competitiveness Report which is critical in enabling the country’s economic actors to achieve the robust economic goal of 7% growth in gross domestic product. Speaking at a media briefing in Harare yesterday, NECF executive secretary Norman Chakanetsa said the report would provide a baseline to understand Zimbabwe’s competitiveness, provide information for policymakers, the basis of attracting foreign direct investment and make a comparative analysis of other countries, among many other things.
Zambia: China Copper Mines closes down (The Post)
China Copper Mines Limited has been forced to put its operations on care and maintenance, “against its will” because of the government’s interference, a company statement announced yesterday. CCM director Yu Wang Ping stated yesterday that the mining company has further been forced to suspend US$50 million investment which would have created employment for over 1,000 citizens.
Dubai Chamber briefing focuses on investment potential of Mozambique (Dubai Chamber)
Hamad Buamim, President and CEO, Dubai Chamber of Commerce and Industry, called upon UAE businesses to benefit from the Chamber’s strategy of exploring investment opportunities in promising markets of Africa in general and Mozambique in particular which he said offers immense business potential to UAE investors. Buamim highlighted agriculture, infrastructure development, hydrocarbons, manufacturing, mining and tourism as promising areas of investment for joint cooperation between Dubai businesses and their Mozambique counterparts. The President and CEO of Dubai Chamber informed that Mozambique is an important trade partner for Dubai in Africa as a lot of synergies exist between the two sides. A 500% increase in trade between 2004 and 2014 is a proof of this as the non-oil trade between Dubai and Mozambique increased from close to AED 190 million in 2004 to AED 1.02 billion in 2014, he said.
Nakumatt takes over Shoprite Uganda shop in EAC expansion drive (Business Daily)
Regional retailer Nakumatt has taken over the branch building that previously hosted Shoprite Supermarkets in Uganda which closed in June citing poor location. Mr Ramamurthy, head of strategy and operations, said the expansion was based on the need to increase Nakumatt’s branch network that now stands at 55 to about 60 by end of the year.
Did you know Africa’s top business brands? (Daily Monitor)
Lafarge Africa records N29bn profit after tax in nine months (ThisDay)
Namibia: Geingob lays down plans for food banks (New Era)
Mozambique: Condor Nuts is certified to export cashew nuts to the United States, Europe and Africa (Club of Mozambique)
East Africa: Regional revenue bodies tipped on single customs territory (New Times)
China communist party paper says country should join US-led trade pact (Reuters)
Ethiopian Airlines targets Asia with new Chinese crew (The Standard)
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India plays catch-up in Africa as China trade dominates
India is seeking to strengthen its foothold in Africa as it plays catch-up on a continent where investment and trade has been dominated by China.
Prime Minister Narendra Modi is welcoming African leaders, including Nigeria’s Muhammadu Buhari and South Africa’s Jacob Zuma, to New Delhi this week for talks to strengthen economic and political ties. Also on the agenda at the India-Africa summit from Oct. 26 to 29 are public health issues, reform of the United Nations Security Council, terrorism and climate change.
While India has a centuries-long history of trade with Africa, that relationship got a significant boost after 2008 as India sought markets outside of the U.S. and Europe to sustain the growth of its economy. Total trade with sub-Saharan Africa has surged by almost two-thirds to $62.1 billion in the four years through 2014, according to data from the International Monetary Fund.
“The 2008 global financial crisis was the change agent,” Rajrishi Singhal, a senior fellow in geoeconomics at Mumbai-based Gateway House, said in a report. “It brought into sharp relief the perils of India’s excessive reliance on western developed economies, mainly North America and Europe, for trade and investment. This forced India to diversify its focus towards other economies in Asia, Latin America, and Africa.”
India is now the biggest buyer of Nigerian oil, having overtaken the U.S. in 2013, according to IMF data. After Nigeria, India’s biggest trading partners on the continent are South Africa, an exporter of gold and coal, and Angola, the region’s second-largest oil producer.
Concessional Loans
“Raw materials still make up the lion’s share of African exports to India,” Amadou Sy, a senior fellow at the Washington-based Brookings Institution, said in a report. “This imbalance does not necessarily align with Africa’s goals to diversify away from natural resource dependence, which is a common issue in Africa’s trade relationships with China, the U.S., and the European Union.”
India has approved about $9 billion in concessional credit for projects in African countries in the past decade, Sushma Swaraj, India’s minister for external affairs, said on Tuesday at the start of a meeting of foreign ministers in New Delhi.
China’s trade push in Africa this decade has been far more aggressive. Total trade between the world’s second-largest economy and sub-Saharan Africa has more than doubled to $184 billion from 2010 to 2014, according to the IMF. That’s about three times the value of India’s trade in the region.
“I don’t think India is driven by what China does with Africa,” Singhal said by phone on Monday. “For us to compare ourselves is silly. It’s not premised on that. Unlike China, we’ve been trading with them for centuries.”
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Latest developments in national and international investment policies
UNCTAD’s latest Investment Policy Monitor shows that, as in previous review periods, the vast majority of new investment policy measures aimed at creating more favourable investment conditions. In total, 41 measures were taken by 25 countries.
The Monitor finds that the share of liberalization and promotion measures reached eighty-five per cent. All investment promotion measures granted tax incentives for investments or facilitated investment procedures. New investment restrictions for foreign investors were mainly based on strategic or national security considerations.
Regarding international investment policies, the Monitor finds that eleven countries concluded seven new international investment agreements (IIAs). These include four bilateral investment treaties (BITs) and three “other IIAs”. Negotiations were concluded for seven IIAs, including the megaregional Trans-Pacific Partnership agreement, and negotiations are ongoing for numerous other investment treaties.
UNCTAD’s Investment Policy Monitor is a regular publication that provides the investment and development community with country-specific, up-to-date information about the latest development in foreign investment policies, both at the national and international level.
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Full and swift implementation of the WTO Trade Facilitation Agreement can deliver large trade dividends to developing and least-developed countries
Implementation of the WTO Trade Facilitation Agreement (TFA) has the potential to increase global merchandise exports by up to $1 trillion per annum, according to the WTO’s flagship World Trade Report released on 26 October 2015 in Geneva – the first detailed study of the potential impacts of the TFA based on a full analysis of the final agreement text. Significantly, the Report also found that developing countries will benefit significantly from the TFA, capturing more than half of the available gains.
Director-General Roberto Azevêdo, in marking the launch of the report, said:
“The world is more connected than ever before. More and more developing countries are seeking to join global trade networks. Yet, all too often, outdated and uncoordinated customs processes slow down the movement of goods and raise costs to prohibitive levels. By standardizing, streamlining and speeding-up customs processes around the world, the WTO’s Trade Facilitation Agreement will help to solve this problem. It is global trade’s equivalent of the shift from dial-up internet access to broadband – and it will have a similar impact.
“This report takes a rigorous, detailed look at the impact of the Trade Facilitation Agreement. It provides new evidence of the significant boost that the Agreement will provide by expanding world trade, reducing costs and helping developing and least-developed countries to integrate into an increasingly globalized production system. The report also highlights previously unseen benefits for developing and least-developed countries, such as increased investment and economic diversification.
“This underlines the importance of implementing the agreement in full – and doing so as quickly as possible. In fact, the report shows that the benefits of the agreement will be substantially larger depending on the scope and pace of implementation. The more extensive and faster the implementation of the TFA, the greater the gains.”
The TFA was agreed by WTO members at a ministerial conference in Bali in December 2013. It was the first multilateral agreement successfully negotiated at the WTO. The 2015 World Trade Report is the first major study since the agreement was reached in Bali to examine its economic implications in full. Previous studies which were published by other institutions in advance of the Bali conference produced various predictions about the potential effects of trade facilitation in general and the TFA in particular. The aim of this Report is to provide a fresh, rigorous analysis based on a clause-by-clause study of the final agreement text.
The Report’s findings support those of previous studies on the scale of the potential headline benefits while also giving significant further detail and outlining a range of other benefits of the agreement, particularly for developing and least-developed countries. For example, the TFA could help developing countries diversify their exports, increase their involvement in global value chains, expand the participation of small and medium enterprises in international trade, help to attract more foreign direct investment, increase government revenues and reduce corruption.
Key findings on the impact of the TFA
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Global merchandise exports estimated to increase by between $750 billion and $1 trillion per annum.
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Developing countries’ exports estimated to increase by between $170 billion and $730 billion per annum.
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Developed economies’ exports estimated to increase by between $310 billion and $580 billion per annum.
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Fuller, faster implementation of the TFA will increase the likelihood of impacts reaching the higher ends of these ranges.
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Overall boost to world export growth per annum estimated at up to 2.7 per cent.
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Overall boost to global GDP growth per annum estimated at 0.5 per cent.
Other benefits of the TFA
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The TFA is expected to help developing countries diversify their exports. If the TFA is fully implemented, developing countries could increase the number of new products exported by as much as 20 per cent with LDCs likely to see a much bigger increase of up to 35 per cent. Developing countries are expected to enter an additional 30 per cent more foreign markets and LDCs a further 60 per cent more.
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Many developing countries have sought to participate in global value chains to expand their trade, improve access to technology and increase productivity. Timeliness and predictability in the delivery of intermediate goods are essential to the successful management of global value chains. As the TFA is expected to reduce both delays and variability in delivery time, it should increase the opportunity for developing countries to participate in these value chains.
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Trade facilitation is critical to reducing trade costs which remain high despite the steep decline in the cost of transportation, improvements in information and communication technology, and the reduction of trade barriers in many countries. Full implementation of the TFA could reduce trade costs of members by an average of 14.5%.
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Small and medium enterprises (SMEs) suffer more from administrative burdens than large enterprises particularly in developing countries. Exports by SMEs are more sensitive to delays at the border than exports by large firms. Since the TFA will reduce delays at the border, it increases the opportunity for SMEs to become more integrated in international trade.
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Based on evidence from 141 countries over a ten year period (2004-2013), there is a positive and statistically significant link between improvements in trade facilitation and inward flows of foreign direct investment (FDI). This suggests that TFA implementation will help developing countries attract more FDI. Further, implementation of the TFA could be interpreted by foreign investors as a signal of improvement in the overall investment climate which would induce inward FDI flows even in those sectors in the domestic economy which are not highly dependent on trade.
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The TFA could help to increase customs duties and other taxes collected at the border, on which many LDCs are dependent for their revenues. Inefficient trade procedures reduce the volume of goods passing through customs and result in foregone revenues. Furthermore, there is evidence to show that the likelihood to engage in fraudulent practices at the border is higher the longer the time needed to clear goods. By simplifying trade procedures and reducing the time to move goods across borders, the TFA will increase the volume of goods flowing through customs, reduce the scope for corruption and increase the amount of revenues collected.
Implementing the Agreement
The TFA is unique in the history of multilateral trade agreements in that it allows each developing and least-developed member to self-determine when it will implement the respective provisions and what it needs in terms of related capacity building support. Moreover, it ensures that this practical support will be provided. The Trade Facilitation Agreement Facility was established in 2014 by Director-General Azevêdo to help members access this support, and to provide additional support if other sources cannot be identified.
Empirical evidence highlighted in the Report shows that the availability and sustainability of financial resources are crucial. However, it also shows that other factors are necessary and critical for successful implementation of trade facilitation reforms. Strong political will at the highest levels is identified as a key factor. Other important elements identified include: cooperation and coordination between ministries and border management agencies; and private sector stakeholders’ participation.
Efforts to monitor the progress of the TFA after it comes into force should include evaluations of both implementation costs and economic impacts. Realising the full potential benefits of the Agreement will require political will over a long term process of reforms. Good indicators, more data and better analytical tools will be required to effectively evaluate the evolving economic impact of the TFA. The WTO and other international organizations and regional development banks have an important contribution to make in this regard.
Methodology
The Report’s main findings, as detailed above, have been reached using the ‘computable general equilibrium’ (CGE) model. This model was chosen in order to produce robust, conservative estimates of the potential impacts of the TFA. To complement these findings the Report also uses a separate economic modeling approach, known as the ‘gravity’ model.
Applying both approaches allows the Report to answer different questions and to compare the results to the body of existing research on trade facilitation. Both models showed that the potential gains from the TFA are large and that developing countries will capture the majority of the resulting economic opportunities.
The gravity model (which is the model more commonly used by previous studies of the impacts of trade facilitation reforms such as the well-known Peterson Institute study of 2013 for example) produced significantly higher results. This model found that the TFA would boost global merchandise exports estimated by between $1.8 trillion and $3.6 trillion. Significantly, it also found that LDC exports would increase by between 13% to 36%, much more than either developed or developing economies.
This suggests that the impacts of the TFA could prove to be even more positive in the longer term.
» Download: World Trade Report 2015 (PDF, 7.48 MB)
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Third India-Africa Forum Summit: Statement by External Affairs Minister Sushma Swaraj
Statement by India’s External Affairs Minister Smt. Sushma Swaraj at the Foreign Affairs Ministerial Meeting of the Third India-Africa Forum Summit (IAFS), 27 October 2015, New Delhi
I would like to extend a very warm welcome to all of you. We are grateful that all of you accepted our invitation to be here today. Your participation in this India-Africa Forum Summit makes this very special. Your participation is also a testament to the close friendly ties between India and Africa.
Our longstanding ties originated in maritime links thousands of years ago. We have also had the common experience of a colonial past and have been united in our solidarity to resist colonialism. In recent decades, we have worked together to demand a more just and fair international political and economic order.
The Indian Diaspora of about 3 million in Africa forms an important link between our countries. They have worked together with their African brethren in opposing colonialism in the past and are today working for economic development in their home countries. We are proud that India and Africa represent rapidly growing economies with demographic advantages and are building on their longstanding partnership.
Excellencies,
This is the Third India-Africa Forum Summit. We have gained some experience of engagement in this format. We now know what works and what doesn’t. Most importantly, we have heard what you have been telling us, of how we can pool our strengths and use our talents and experience to respond more effectively to your needs. We are committed to a people-centric approach which focuses on capacity building, human resource development and technical and financial support for our mutually agreed priorities.
In the past seven years, a total of 40,000 scholarships have been provided by Government of India to Africa. Since the Second India-Africa Forum Summit in 2011 alone, the figure stands at over 24,000 scholarships. Our scholarships and training programmes have spanned more than 300 training programmes in over 60 reputed institutions.
In addition, we have given higher education scholarships at various universities and distance learning through the Pan Africa e-network. Through these programmes, we have endeavoured to develop African capabilities in areas ranging from marine hydrography to renewable energy, and from rural development to cyber security.
We are very happy to host African students in India. They enrich our cultural fabric and contribute to mutual learning and understanding. I am also certain that they are valuable assets for African countries in their quest for development when they go back. The bonds of friendship that they develop in India further add to our age-old people-to-people ties.
We have also utilised the vehicle of Lines of Credit to foster economic and infrastructural development in Africa. In the last decade, a total of almost 9 billion US dollars in concessional credit has been approved for nearly 140 projects in more than 40 African countries and ECOWAS by Government of India. So far, nearly 60 projects have been completed. These projects range from agriculture in Burkina Faso and Madagascar to road transportation in CAR and Senegal; and from railway rehabilitation in Angola and Benin to sugar industry rehabilitation in Ethiopia and Sudan.
Excellencies,
Today, India is rising, and so is Africa. We are the most rapidly growing developing economies in the world. We are very happy to note the intensification of India-Africa economic engagement in recent years. Our bilateral trade has multiplied 20 times in the last 15 years and doubled in the last five years to reach nearly 72 billion US dollars in 2014-2015.
India was among the first emerging economies to unilaterally put in place a duty-free market access scheme for LDCs. In 2014 we expanded this scheme to now include 98% of tariff lines. The benefits of this scheme extend to 34 African countries to increase their exports to India.
There is growing investment by Indian companies in Africa in a range of sectors, such as telecommunications, hydrocarbons, agriculture, manufacturing, IT, water treatment and supply, drugs and pharmaceuticals, coal, automobiles, floriculture and textiles. Such investment brings in capital and technology, and assists value addition and industrialisation. It also leads to diversification of economic activity and most importantly generates employment and skill development for local populations.
We also have strong on-going cooperation through training and negotiations on global trade issues, including at WTO to protect and promote the legitimate interests of developing countries, especially the LDCs. Our Trade Ministers met here in New Delhi last week. This provided a useful opportunity to discuss ways to expand our economic and commercial cooperation.
Earlier, the Third Meeting between India and the eight Regional Economic Communities of Africa was held in New Delhi in August 2014. India and the RECs have the potential to work together to enhance cooperation in various areas including human resource development, capacity building and regional projects.
Excellencies,
This Summit takes place at a time of momentous developments in the international arena. 2015 has been a landmark year for global issues. Just last month the international community adopted a set of Sustainable Development Goals as part of the broader 2030 Agenda for Sustainable Development at the UN General Assembly.
India and Africa have worked together to develop a common understanding of our core priorities for an inclusive economic growth to eradicate poverty and allocate adequate resources for sustainable development. Financing for Development, on which the 3rd International Conference was hosted in Addis Ababa is a critical aspect that will determine the success of our efforts.
We have also watched with interest the adoption of the Agenda 2063 in June this year by the African Union, which provides a clear roadmap for the future. Our similar and shared experiences and struggles translate into similar scale of challenges and concerns, both at the level of national priorities and collective interests in an increasingly globalised world. There is considerable synergy between the priorities being pursued by the Government of India and Africa’s Agenda 2063.
In the past, the solidarity between India and Africa was vital to defeat the forces of colonialism. Today, India and Africa are engaged in an equally vital struggle – the struggle to eliminate poverty and uplift our people. All of us are working to ensure provision of healthcare, education, employment, access to modern energy services, infrastructure, and connectivity between resources and markets. The similarity of our priorities and shared purpose provide special strength and context to our partnership.
Providing universal access to primary healthcare and battling diseases are particularly urgent priorities for both India and Africa. Ensuring access to affordable and quality medicines and treatment is an important area of our cooperation. We recognise the value of training of doctors and healthcare personnel, including through tele-medicine utilising modern technology, the use of affordable generic medicines, promoting the use of traditional medicines and their regulatory procedures.
Over the last several years, India has been an active participant of the international efforts to meet the challenges posed by pandemics, including Ebola and HIV/AIDS in Africa. The Pan African e-Network project links a large number of super-speciality hospitals in both India and Africa.
Our cooperation extends to other areas as well. These include agriculture, education and skills development, energy and infrastructure, science & technology among others. Blue or Ocean economy, maritime security and counter-terrorism are also areas where we need to focus more.
An ancient African proverb says it takes a whole village to raise a child. And nothing is more important in the village than the role of mothers. Both India and Africa greatly value and are committed to work together to promote gender equality and empowerment of women. The African Union is celebrating this year as the Year of Women Empowerment.
In India too, we have taken several measures to further protect and promote women’s rights. Our flagship programme Beti Bachao Beti Padhao is a nation-wide campaign to increase awareness on celebrating the girl child and enabling her education. This is another area where we can collaborate further.
Excellencies,
In a month’s time, the international community will gather in Paris to conclude an ambitious agreement to combat climate change. Our negotiators are cooperating closely in Bonn currently. We look forward to finalising an ambitious and comprehensive climate change agreement based on the principles of equity and common but differentiated responsibility.
The challenge of global warming can only be addressed adequately through technological solutions and financial resources to manage the transition. The developing countries, while undertaking ambitious actions on their own, need to be assisted to mitigate climate change and to adapt and adjust to its impact. India and Africa have shared concerns and interests in this regard.
The Paris meeting on Climate Change will be closely followed by the 10th Ministerial Meeting of the WTO in Nairobi. The international trade regime is another very important aspect that shapes the possibilities for promotion of improved livelihoods and standards of living in our countries. We have noted with interest, the recent announcements regarding the signing of a Tripartite Free Trade Agreement and the launch of negotiations for the creation of a Continental Free Trade Agreement in Africa. These are important developments and will stimulate further trade and investment.
India and Africa have also cooperated with other partners, including third countries and international groupings and institutions, on certain capacity building projects. The special concerns and priorities of the Least Developing Countries, Landlocked Developing Countries and the Small Island Developing States relating to economic and development needs and protection against vulnerabilities, require collective action by the international community.
In 2014, India and Africa actively participated in and endorsed the outcomes of the 2nd UN Conference on Landlocked Developing Countries held in Vienna; the Ministerial Conference on LDCs held in Benin and the 3rd UN Conference on SIDS held in Samoa. I am sure that we will continue to work together in promoting the interests of the LDCs, LLDCs and SIDS as part of their partnership.
Excellencies,
We have just celebrated the 70th year of the establishment of the United Nations. Although Indians and Africans comprise nearly 2.5 billion people, our nations continue to be excluded from appropriate representation in the institutions of global governance. Unless we put in place more democratic global governance structures, the more equitable and just international security and development frameworks that are essential for the collective peace and prosperity of this planet, will continue to elude us. There can no longer be pockets of prosperity in vast areas of underdevelopment and insecurity.
India and Africa can no longer be excluded from their rightful place of the permanent membership of the UN Security Council. How can we expect legitimacy from a governance structure that excludes the entire African continent and a country, which represents one-sixth of humanity? The 70th session of the UN General Assembly is an opportune moment to achieve concrete results on this long pending issue.
We welcome the progress achieved during the 69th session of the UNGA under the leadership of H.E. Mr. Sam Kutesa towards commencing text-based negotiations. We look forward to working together in an active negotiating process to take this forward.
UN peacekeeping is another area where India and Africa have a long history of cooperation. Over 180,000 Indian troops have participated in UN peacekeeping missions - more than from any other country. At the Leader’s Summit on Peacekeeping in New York last month, Prime Minister Modi had announced that India will further scale up its participation in UN peacekeeping operations, including by providing training for African peacekeepers at our facilities in India and in the field. Our all-female Formed Police Unit to the UN Mission in Liberia, a first in UN history, has proved to be an inspiration for women everywhere.
However, the new international security environment and the evolving nature of conflicts are posing new challenges to the effectiveness of traditional peacekeeping missions. Greater involvement of the Troop Contributing Countries in the decision making process, including formulation of mandates and provision of adequate resources, is essential for the success of such endeavours.
All our nations find themselves faced with the growing scourge of terrorism. The menace of non-state actors and cross border terrorism has acquired a new dimension. The scale of this challenge is huge and undermines the peace and stability in our countries, which is essential for our development efforts. In view of the fast growing linkages of such terrorist groups across the globe, we must step up our cooperation through intelligence exchange, training and other measures to counter this menace. We also hope that the international community will cooperate with urgency to adopt the Comprehensive Convention against International Terrorism.
Excellencies,
Our cooperation is multi-faceted and growing. The India-Africa Forum Summits are making immense contribution in this regard. I believe there would be merit in putting in place a regular review mechanism that can evaluate the progress of implementation of the various cooperation initiatives between India and Africa at the bilateral, regional and pan-African levels.
Our Senior Officials have met yesterday to finalise the two outcome documents – a draft Political Declaration and a draft Framework of Strategic Cooperation. I understand that the Outcome documents have been discussed in detail by the two sides and an understanding agreed upon. You may like to convey any comments that you may have on the two documents, so that we can forward the finalised texts to our leaders for adoption.
Before ending my statement let me once again welcome you all to Delhi. I hope you will have a wonderful stay.
Thank You.
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WTO Committee on Technical Barriers to Trade: Request for observer status by ARSO and IGAD
Request for observer status by the African Organization for Standardization (ARSO) to the WTO Committee on Technical Barriers to Trade: Submission from Uganda
The delegation of Uganda has noted the request for observer status in the WTO TBT Committee by the African Organization for Standardization (ARSO) from a document circulated by the Secretariat on 12 October 2015.
Uganda would like to inform Members that the mandate of ARSO includes the development of tools for formulation, harmonization and implementation of standards with the cardinal objectives of enhancing Africa’s internal trade capacity, increasing the global competitiveness of Africa’s products and services and uplifting the welfare of consumers in Africa. In according to its vision and mission, ARSO strives to promote trade and industry and facilitate intra-African and global trade through provision and facilitation of the implementation of harmonized standards that are normally used as the basis for technical regulations and conformity assessment procedures.
In carrying out its mandate, ARSO seeks to, inter alia, encourage and facilitate the adoption of international standards by its Members Bodies; coordinate the view of its Members at the International Organization for Standardization (ISO), International Electrotechnical Commission (IEC), International Organization of Legal Metrology (OIML), FAO/WHO Codex Alimentarius Commission, and other international organizations that provide standardization and related activities; and promote and facilitate exchange of experts, information and cooperation in training in standardization activities. ARSO is also coordinating the continental-wide harmonization of standards to promote intra-African and global trade.
In addition, two key strategic objectives of ARSO within the ARSO strategic framework 2012-2017, are to establish a standards harmonization system that supports a sound regulatory framework and disseminate harmonized standards, guidelines and recommendations to support intra-, inter- African and international trade and these closely relate to the discussions held in the TBT Committee.
The above attributes of ARSO are in tandem with the Preamble, Article 2.6 and Annex 3, paragraphs F and G of the TBT Agreement.
The delegation of Uganda therefore recognizes that ARSO is a relevant standardization organization in the area of harmonization of standards and technical regulations within the African continent and ARSO is especially useful in spearheading the adoption of international standards that are usually incorporated into technical regulations which if not harmonized can create unnecessary obstacles to international trade.
On the basis of the attributes of ARSO outlined above, the delegation of Uganda supports the request for observer status of ARSO in the TBT Committee and would like to recommend that the Committee grants the request.
Request for observer status by the Inter-Government Authority on Development (IGAD) to the WTO Committee on Technical Barriers to Trade: Submission from Uganda
Uganda would like to recall that the Chairperson of the TBT Committee informed Members in the Committee meeting of 17-18 June 2015 that a new request for observer status in the TBT Committee was received from the Inter-governmental Authority on Development (IGAD).
The delegation of Uganda has reviewed the request for observer status made by the IGAD Secretariat circulated by WTO Secretariat and would like to note that the aims and objectives of IGAD include, inter alia; promotion of free movement of goods and services; creation of an enabling environment for foreign, cross-border and domestic trade and investment; initiate and promote programmes and projects for sustainable development of natural resources and environment protection; facilitate, promote and strengthen cooperation in research, development and application in the fields of science and technology.
In addition, one of the areas of cooperation among IGAD Member States is to develop and expand cooperation and undertake to coordinate their effort to: preserve, protect and improve the quality of the environment; develop harmonious environmental management strategies and policies; work towards the promotion of trade and gradual harmonization of their trade policies and practices and the elimination of tariff and non-tariff barriers to trade so that it can lead to regional economic integration; and cooperate in the gradual harmonization of their national policies in scientific and technological research and development, transfer of technology, and their policies on capacity building in science and technology.
As can be recognized from the preceding paragraphs, some of the aims and objectives of IGAD and areas of cooperation of IGAD Member States relate closely to the issues that are regularly discussed by the Committee on Technical Barriers to Trade as well as to the aims and objectives and scope of the TBT Agreement.
Furthermore, the Agreement establishing IGAD provides for the Authority to relate with other regional organizations and inter-governmental and non-governmental agencies in pursuit of its aims and objectives. In this respect, the delegation of Uganda believes that the WTO is one such inter-governmental organization which IGAD can relate and cooperate with.
The delegation of Uganda also believes that granting IGAD observer status in the TBT Committee will enable IGAD Secretariat to better monitor the developments in the Committee and advise its Member States on how to exercise their rights under the TBT Agreement and enhance their compliance with the obligations in the Agreement.
It is in line with the above background that Uganda supports the request for observer status by IGAD in the WTO TBT Committee.
UPDATE: At their formal meeting on 4-6 November 2015, the Members of the Committee on Technical Barriers to Trade agreed to grant ad hoc observer status to the African Standards Organization (ARSO) and the Intergovernmental Authority on Development (IGAD) in response to the requests from these organizations.
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tralac’s Daily News selection: 26 October 2015
The selection: Monday, 26 October
Starting today, in Cape Town: Current and future challenges for the multilateral trading system - perspectives from Southern Africa
The event, 26-28 October, is aimed at journalists and civil society representatives from the following southern African countries: Angola, Botswana, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, South Africa, Swaziland, Zambia and Zimbabwe.
AU Informal Trade Ministerial Meeting: statement by Ambassador Amina Mohammed (WTO)
I believe that we must seize the opportunity that Nairobi offers to deliver a positive outcome for the Organization, and for the future of multilateral trade relations. A “no result” scenario is not a viable option. A successful conference would be the springboard for further progress in the WTO and would pave the way for future discussions at the multilateral level. If we are not successful this December, we cannot hope to restore credibility to the negotiating arm of the WTO – not now, nor in the future. Nairobi cannot be allowed to fail. [After being blamed of blocking deal, India to adopt a balanced approach at WTO meet (Economic Times)]
Featured infographic, @calestous: How Africans restrict their own travel through visa practices [Response by @DlaminiZuma: .@calestous That map would be shared with AU Heads of State & Govt as we press on we our integration Agenda]
With aid package, India hopes to regain lost ground in Africa (Mint)
India is set to announce a substantial aid package for Africa this week as it looks to deepen linkages with the resource-rich continent, where it once wielded considerable influence but has, in recent decades, found itself jostling for prominence with China. Prime Minister Narendra Modi, the host of the third India-Africa Forum Summit in New Delhi, will be making the announcement on the aid package - estimated at between $7bn and $15bn - on Thursday, when he sits down with the leaders of some 40 African countries and representatives of 14 others in a bid to re-script ties between Asia’s third largest economy and the world’s new growth pole.
A selection of IAFS links: Sanusha Naidu: 'Articulating the African voice' (Gateway House), India must resist US pressure on generic drugs, African leaders to tell Modi (The Wire), India to align itself with Africa's Agenda 2063 (Business Standard), Beyond oil: India needs to reimagine its ties with Nigeria (Scroll.in), India sees Africa as natural partner – Ms Nirmala Sitharaman (Press Information Bureau)
Free entry visas for Mozambicans into SA extended to 90 days as from 2016 (Club of Mozambique)
President Filipe Nyusi of Mozambique and his South African counterpart Jacob Zuma have agreed to extend free Visas between the two countries to 90 days from the initial one month as of January next year, APA has learned here on Saturday. The two leaders also agreed to ensure that the border post of Ressano Garcia linking the two countries would operate 24 hours a day, from next year.
SA amends its visa regime - a selection of links: Delight at easing of SA’s visa rules (Business Day), Inter-ministerial committee on immigration regulations: cabinet statement (GCIS), Department of Home Affairs on immigration amendment acts and regulations (GCIS), Western Cape response to visa law changes (GCIS), SA revises visa regulations; no more hassles at the border (Swazi Observer), East3Route wants to improve immigration regulations (Swazi Observer)
Feeding Africa conference adopts plan for agricultural transformation (AfDB)
The adoption of an action plan and wide-ranging partnerships to transform African agriculture into viable agri-business were the main outcomes of the three-day high-level conference on Africa’s agricultural transformation, which ended in Dakar, Senegal, on Friday. The conference also approved a list of organisations to lead initiatives aimed at raising agricultural productivity across the continent, in close partnership with the African Development Bank, the World Bank and development partners. Also [various agencies] will work closely with other development partners in the development of agro-allied industrial zones and agricultural corridors. The goal is to accelerate investments in integrated infrastructure to improve the competitiveness of Africa in processing and value addition to agricultural products. [Closing remarks by Akinwumi Adesina, Profiled conference background paper: Regional and international trade, Access the complete set of background papers]
ECCAS: corridor transport update (AfDB)
The Board of Directors of the AfDB met in its ordinary session on 21 October 2015, and approved the Ketta-Djoum road development and Yaoundé-Brazzaville corridor transport facilitation project-Phase 2, with a view to boosting economic and social development and regional integration in the Economic Community for Central African States area. The estimated total project cost is UA 302.190 million (approximately US $424 million) and comprises road works, ancillary infrastructure, transport facilitation, transport sector studies and institutional support, biodiversity support, and project management. This road project is an important segment of the highway linking the capitals of Congo (Brazzaville) and Cameroon (Yaoundé) that will directly benefit road users and communities within the project area. Apart from developing trade between the two countries, the project will additionally contribute to the consolidation of regional integration in Central Africa by facilitating highway interconnections linking Cameroon, Congo, the DRC, Gabon, Equatorial Guinea and the Central African Republic.
WAEMU countries face a well-known dilemma between the need to provide shock-smoothing mechanisms and the lack of adequate mechanisms to do so. WAEMU countries are subject to frequent and, to a large extent, asymmetric shocks. They have remained poorly diversified and vulnerable to external shocks, such as changing weather conditions. In addition to limited shock-smoothing mechanisms at the regional level, WAEMU members’ ability to respond to shocks through national policies is also constrained by limited fiscal space and the need to preserve external stability—not only at the national level but also at the union level.
Kenya: Improving the competitiveness of Kenya's manufacturing sector (World Bank)
Analysis shows that the performance of the timber-furniture, textile-apparel, and leather and leather products value chains in Kenya are important for employment and growth in the country. The reports provide an updated and comprehensive analysis of competitiveness for these manufacturing sectors in Kenya. They also suggest ways to accelerate growth, productivity, and innovation of Kenyan firms in these sectors. While Kenya has made some headway in the global apparel market, there is an opportunity to grow faster by addressing bottlenecks to competitiveness, says the Apparel and Textile Industry report. The Furniture Industry report finds that Kenya is the largest market for furniture and also the largest producer of furniture in East Africa. Its market is expected to grow at an 8% Compound Annual Growth Rate between 2013 and 2018, driven by the growing population, urbanization, and increasing purchasing power. According to the Kenya Leather Industry report, Kenya is the third largest livestock holder in Africa, but a number of factors hinder the growth of its leather industry. [Downloads available]
Can India make it without manufacturing? (East Asia Forum)
Why investing in women’s ability to trade makes sense (The East African)
Despite this, East Africa’s trade potential is undermined by constraints that women face, including various specific non-tariff barriers that impinge particularly heavily on the trade activities of women and women-owned enterprises, and often push women traders and producers into the informal economy where lack of access to finance, information, and networks jeopardise their capacity to grow and develop their business. Gender inequality in access to and control of a wide range of assets and resources remains pervasive: Women farmers tend to produce 20 to 30 per cent less than their male counterparts because they have less access to vital inputs such as seeds, fertilisers and tools. Responsive trade policies are needed to provide a level playing field for the effective participation of women in domestic and international trade. [The author, Lisa Karanja, is senior director, business competitiveness at TradeMark East Africa]
UN committee debate on preventing illicit financial flows in Africa (UN News Centre)
Capturing illicit financial flows could provide a “hidden resource” for funding development, delegates heard at a joint meeting of the Second Committee (Economic and Financial) and the Economic and Social Council. Calling for a “development lens” to address illicit financial flows, Amb Nour, Representative of the Economic Commission for Africa, said that such flows in some African countries had reached up to 16% of GDP. That was the case even as the number of those living on less than $1.25 a day had increased from 290 million in 1990 to 414 million in 2010. Recalling the experience of Bolivia, he added that by renegotiating its contracts, the country had boosted its revenues from the hydrocarbon industry from $287bn in 2004 to $1.6bn in 2008. In the ensuing discussion, the representative of Liberia said that destination countries were also responsible for repatriating the funds that flowed out of Africa illicitly. Lesotho’s delegate underscored that the entire responsibility was not just on the “victim” but also on the countries where the criminal activities had originated.
Health vulnerabilities of mobile and migrant populations in and around the Port of Durban (IOM)
This study was carried out with the support of International Organisation for Migration Southern Africa Regional Office and IOM Mozambique Office as part of a SADC funded initiative to identify HIV risk profiles for four Southern African ports using the concept of ‘Spaces of Vulnerability’ where the interaction of all groups in the space are discussed and key programming issues identified to reduce vulnerability to HIV transmission.
Developing a 'port performance scorecard' (UNCTAD)
At the end of September 2015, 42 port operators from Africa, Asia, Europe, Latin America and the Caribbean gathered for a week in Indonesia to jointly defined scorecard of indicators to help ports achieve greater competitiveness. Based on a bottom-up approach, the strategy is to develop metrics that are available easily and useful to port managers. Many other performance indicators used by port managers are difficult to use when comparing between ports, while economic metrics employed in studies can be expensive to compile and are generally not used by managers on a regular basis. Using the "port performance scorecard" method however, allows managers to collect data based on available, timely, useful, and comparable information.
New ILO regional chief to push for voice of SADC private sector (Southern Times)
The newly appointed Bureau of Employers’ Activities (ACT/EMP) regional representative Maria Machailo-Ellis said the SADC private sector should participate meaningfully both at member state and regional levels to ensure the needs and interests of business are an integral part of the integration strategy by SADC. Machailo-Ellis who is currently the Chief Executive of Business Botswana will take up her position effective January 2016. Machailo-Ellis will be in charge of the Employers Activities in 10 countries in Southern Africa and other regions among them Botswana, South Africa and Rwanda and she will be based in South Africa.
Background note: Employment and new technologies - opportunities for Africa’s youth (prepared for ILO's 13th African Regional Meeting)
Uchumi Supermarkets restructuring wreaks havoc on East Africa (The East African)
Swaziland: Financial inclusion increased to 73% (Swazi Observer)
SA-Mozambique: joint communiqué (GCIS)
South Africa: Local firms look to grow beyond Africa (Business Day)
Botswana: Unfair laws distort competition - Kaira (Mmegi)
Zimbabwe: Winning bids for dualisation out soon (The Herald)
Zimbabwe: Government to meet investors, policy makers (NewsDay)
Egypt's parliamentary elections credible, COMESA team
World’s MPs commit to action on digital freedom and fairer migration (IPU)
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Kenya launches Priority Manufacturing Sector reports to stimulate Kenya’s economy
The Ministry of Industrialization and Enterprise Development in partnership with World Bank and manufacturing sector stakeholders have launched the Priority Manufacturing sector, value chain reports to stimulate Kenya’s economy.
The reports show that the performance of the timber-furniture, textile-apparel, and leather and leather products value chains in Kenya are significant to the country’s job and wealth creation.
The reports provide an updated and comprehensive analysis of competitiveness for these key manufacturing sectors in Kenya and offer suggestions strategies and policies to accelerate their growth and increase the productivity and innovation of Kenyan firms in them.
According to Cabinet Sectary for Industrialization Adan Mohamed, the launch of the value chain reports provides is in tandem to the realization of Kenya’s Industrial Transformation Programme and Kenya’s Vision 2030.
While Kenya has made some headway in the global apparel market, there is need to focus towards addressing bottlenecks to competitiveness – says the Apparel and Textile Industry report.
With regard to the Apparel and Textile Industry report, Mr. Mohamed disclosed that subsequent to the renewal of AGOA for another 10 years, the textile-apparel sector remains the country’s growth engine for industrial exports.
“We are uniquely positioned to grow and expand this sector more than ten-fold beyond the current market share of 0.4%. We intend to enter new markets and expand our product range into higher value and niche products,” said Mr. Mohamed.
According to the Export Processing Zone (EPZ) Authority, Kenya’s AGOA exports, employment, and investment in the past four years (2010-2014) grew by 17 percent, 12 percent, and 21 percent per year, respectively, taking up a third of all apparel exports from Sub-Saharan Africa to the US.
“Kenya’s textile and apparel sector has the potential to grow, increase its contribution to GDP, and serve as a source of gainful employment for its fast growing, young population – says Diarietou Gaye, the Bank’s Country Director for Kenya.
The Furniture Industry report finds that Kenya is both the largest market for furniture and the largest producer of furniture in East Africa. Its market is expected to grow at an 8 percent Compound Annual Growth Rate (CAGR) between 2013 and 2018, driven by the growing population, urbanization, and increasing purchasing power.
According to the Kenya Leather Industry report, Kenya is the third largest livestock holder in Africa, but a number of factors hinder the growth of its leather industry. Amongst Kenyan tanneries, a major difficulty is the lack of quality effluent facilities, which increase the environmental and health costs associated with processing finished leather.
In the handbag and travel ware sector, where target markets are high-end international tourists and exports markets, challenges include the high cost and low availability of quality hides, scarce design and process skills, difficulties in accessing and understanding export markets, and the insufficient availability of growth capital. In the footwear subsector, where the competition is largely domestic and based on price, Kenya’s market share has been eroded by imports of new low-cost leather footwear (mainly from China and India) and donated, second-hand footwear (mitumba).
On a cost basis, “it is approximately 30 percent more costly to produce a pair of low-cost men’s leather shoes in Kenya than in Ethiopia,” said Maria Paulina Mogollon, World Bank Finance and Private Sector Development Specialist
“For the Leather value chain, we are aware that over 90% of our USD 94 million leather exports are unfinished wet blue leather. This state of affairs denies us the opportunity for over 35,000 jobs and up to USD 250 million in GDP. We want to ensure that we fully take advantage of the largest livestock base of 60 million,” concluded the Cabinet Secretary.
The value chain reports were prepared by the World Bank through the Kenya Investment Climate Program 2, which is generously supported by DFID and the Dutch Government.
This article first appeared in Standard Digital.
About the reports
Kenya Apparel and Textile Industry
Kenya’s textile and apparel sector has the potential to play a key role in anchoring the country’s deeper movement into middle income status and in serving as a source of gainful employment for its fast growing, young population. As a manufactured good, it offers opportunities for increased value capture and streamlined trade logistics, and for the building of skills and experience from the factory floor to management level. Based on these foundations, it therefore serves as a potential gateway to other manufactured goods, offering opportunities for Kenya to capture an increasing share of global trade and to advance economic diversification.
Such thinking – in terms of the opportunities that textile-apparel presents in and of itself as an economic sector and as a potential spring board to further advancement into manufacturing – played a substantial role in underpinning the African Growth and Opportunity Act (AGOA). AGOA gives most Sub-Saharan Africa (SSA) firms duty free, quota free access to the United States, offering a substantial competitive advantage over other textile-apparel exporting countries. Therefore, the trade agreement has played a pivotal role in the growth of the continent’s textile-apparel sectors.
However, almost 15 years after the launch of AGOA and shortly after its renewal, Sub-Saharan Africa’s trade with the US remains dominated by natural resources. While some manufactured goods feature in the top ten exports from AGOA countries, these are almost wholly from South Africa. Knit and nonknit apparel exports rank 27th and 33rd, respectively, in the value of AGOA countries’ exports, with AGOA countries amounting to under 1 percent of total global apparel trade.
Kenya Leather Industry
In 2014, Kenya’s Ministry of Industrialization requested technical assistance from the World Bank to conduct competitiveness assessments and develop competitiveness strategies for four key industries: textiles and apparel, food processing, furniture, and leather and leather products. The Ministry selected these four industry sectors for serious consideration as priority sectors for industrial development and job creation in Kenya.
The Economic Transformations Group, Inc. (ETG), a sustainable economic development consultancy from New York and Silicon Valley, was contracted to complete the analysis and strategy for the leather industry. ETG built on prior analytical work by Kyram Consultants Ltd.
In the context of Kenya’s long-term vision to become an industrialized middle-income country by 2030, its leather and leather products sector offers an important opportunity for industrialization and diversification of exports. However, value addition in the leather sector has been minimal, and most of Kenya’s exports have been in the form of unprocessed, raw hides and skins. The leather sector can contribute to economic growth through expanding exports of both semi-processed and finished leather goods. The development of the sector involves improving the raw material base (especially the quality of hides and skins), boosting the tanning subsector, producing leather goods, and marketing.
Furniture Industry in Kenya
The Government of Kenya recognizes that the performance of the furniture sector is crucial both to employment and growth in the country. The Ministry of Industrialization and Enterprise Development (MOIED) therefore requested an analysis of both the furniture and timber sectors, in order to understand their current state of development, their main constraints, and the interventions necessary to accelerate their growth.
The objective of this report is to provide a comprehensive value-chain analysis of the Kenyan furniture industry, including the timber sub-sector, in order to assess policy options available to the MOIED and recommend critical interventions to stimulate the industry’ development. By situating Kenya’s furniture industry within the global and regional context, this paper also aims to identify ways in which to boost Kenya’s competiveness in the East African markets and beyond.
The analysis in this report is largely focused on the wooden furniture sector (versus plastics, composites, and other furniture). The bulk of Kenya’s furniture industry is focused on wood, and Kenya has a competitive advantage in wood relative to South Africa, Asian countries, and Europe, which have very competitive value chains in furniture made from other materials.
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India sees Africa as natural partner – Ms Nirmala Sitharaman
4th India Africa Trade Ministers’ Meeting held in New Delhi – Joint Statement Issued
Minister for Commerce & Industry, Ms. Nirmala Sitharaman has said that India sees Africa as a natural partner and together, we can have a positive influence on the future global economic order. Speaking at the 4th India-Africa Trade Ministers’ Meeting in New Delhi on Friday, she said that both India and Africa face similar challenges and concerns and the world economy offers tremendous opportunities to the two Fastest Growing Regions.
The 4th India-Africa Trade Ministers’ Meeting (IATMM) was held in New Delhi on 23 October on the eve of the 3rd India-Africa Forum Summit on October 29, 2015 in Delhi. 37 delegations comprising of Trade Ministers/officials/8 Regional Economic Communities from countries such as Algeria, Angola, Benin, Comoros, Congo, Djibouti, Egypt, Gambia, Ghana, Kenya, Lesotho, Liberia, Malawi, Mali, Morocco, Namibia, Mauritius, Niger, Senegal, Seychelles, Sierra Leone, Somalia, South Sudan, South Africa, Togo, Tanzania, Tunisia, Zambia, and Zimbabwe amongst others participated in the meeting.
Addressing the Trade Ministers, Ms. Sitharaman said that consequent to the First India-Africa Forum Summit in Delhi in 2008, India made an announcement of granting Duty Free Tariff Preference to Least Developed Countries (LDCs) in order to open the Indian market to greater exports from African countries. Since April 2014, the scheme has been further expanded and as of now India provides duty free market access on about 96% of India’s tariff lines and another 2.2% tariff lines to LDCs thus providing benefits on 98.2% of all tariff lines. In addition, India has been one of the first countries to provide a services package for LDCs and has also waived visa fees for businessmen from LDC countries travelling to India.
Highlighting the importance of India-Africa Summit, Ms. Nirmala Sitharaman said “the Summits have become a unique platform where the Government of India and African partners identify areas of cooperation through dialogue and strive to expanding and enhancing the partnership. Cooperation in Trade, Technology and Capacity Building form the basis of our relationship. Greater cooperation in agriculture and agro-processing, engineering, textiles, leather, pharmaceuticals to name a few would have a positive bearing on the food security, improvement in health situation and creation of additional jobs in both Africa and India.”
She highlighted that value addition is the key to development and enhancing livelihood opportunities for people. India has made significant progress transforming itself from being an importer to a net exporter in many sectors since independence. India would endeavour to share its experience and expertise in partnering with African countries which have potential for value addition, creating jobs, enhancing livelihood and ultimately attaining a better quality of life.
The 4th IATMM saw deliberations on Review of progress in the implementation of commitments of earlier India Africa Trade Ministers’ Meetings and Review of Existing Trade and business relations between India and Africa. The two sides also had discussions on Duty Free Tariff Preference (DFTP) Scheme and Services Waiver for LDCs and Cotton Technical Assistance Programme (TAP). The Round Table on WTO issues was also held during the meeting. A meeting of the India Africa Business Forum was a highlight of the event.
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Feeding Africa conference adopts plan for agricultural transformation
The adoption of an action plan and wide-ranging partnerships to transform African agriculture into viable agri-business were the main outcomes of the three-day high-level conference on Africa’s agricultural transformation, which ended in Dakar, Senegal, on Friday.
“This conference has created the synergy needed for effective partnerships to enable us attain our objectives of feeding Africa,” African Development Bank President, Akinwumi Adesina, said at the closing ceremony. “We can do it, we will do it. We will feed Africa, we will feed the world.”
Among the decisions taken by the Finance and Agriculture Ministers and Central Bank Governors who attended the conference is to scale up nutrition programs across Africa to end malnutrition and hunger.
The program, Adesina said, will involve establishing a strategic partnership with President Obama’s Feed the Future Initiative, Grow Africa of the World Economic Forum, the Big Win Philanthropy, the FAO, Scaling Up Nutrition, the World Food Program, the Bill and Melinda Gates Foundation, the Global Panel on Agriculture and Food Systems for Nutrition, as well as the private sector at large, to deploy innovative approaches to addressing malnutrition.
The conference also approved a list of organisations to lead initiatives aimed at raising agricultural productivity across the continent, in close partnership with the African Development Bank, the World Bank and development partners. These include: the Forum for African Agricultural Research, the Consultative Group on International Agricultural Research, the Alliance for a Green Revolution in Africa, as well as national agricultural research systems.
Also, the AfDB, the African Union Commission/New Partnership for Africa’s Development (NEPAD), the UN Economic Commission for Africa, the World Bank, the International Fund for Agricultural Development, and the United Nations Industrial Development Organization will work closely with other development partners in the development of agro-allied industrial zones and agricultural corridors. The goal is to accelerate investments in integrated infrastructure to improve the competitiveness of Africa in processing and value addition to agricultural products.
Other action plans aim to significantly increase commercial financing to the agriculture sector by establishing an African Agricultural Risk Sharing Facility.
“The Bank will work with partners to leverage $3 billion in financing for women farmers, agribusinesses and other women-owned enterprises. This will be achieved through the establishment of a US $300-million facility to de-risk financing to women owned-businesses by commercial banks and microfinance institutions,” the AfDB President said.
The Bank will also triple its climate financing to US $5 billion annually by 2020 by working closely with the African Union, the African Ministerial Conference on the Environment, the United Nations Environmental Program and the G7 for the establishment of the Africa Renewable Energy Initiative. In addition, the Bank will support African countries to have access to the Africa Risk Capacity to manage climate-related catastrophic challenges.
Under the plan, Central Banks in Africa will set aside special funds to allow farmers to access credit at reduced interest rates, and as well for long-term agricultural loans with longer-term maturity.
The Bank will develop Agribusiness Diaspora Bonds to securitize remittance flows for investments in African agriculture and agribusiness; it will accelerate financing to the agriculture and agribusiness sector through private equity funds; and it will leverage sovereign wealth funds and pension funds to support the long-term financing needs of the agricultural sector, especially for critical infrastructure development.
It will also support more functional agricultural development banks; and scale up the establishment of warehouse receipt financing and agricultural commodity exchanges, especially regional agricultural commodity exchanges.
Finally, the Bank will scale up skills enhancement for youths in agriculture and establish an African Youth in Agriculture Financing Facility to support young commercial farmers and youths in agriculture.
“These are bold decisions. And nothing less than bold decisions are needed to transform Africa’s agricultural sector and unlock its huge potential. We must leave here strongly committed to accelerate implementation of actions on these areas. We must act and act with a sense of urgency,” Adesina said.
Also during the meeting Germany’s development bank (KfW) and the Nairobi-based pan-African mobile and digital payments technology company Cellulant announced a broad collaboration that aims to advance the agricultural transformation agenda across the African continent in collaboration with the AfDB.
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A tall agenda awaits energy specialists and policy makers at CCDA 5
Energy specialists and policy makers will have a lot to talk about at the forthcoming Conference on climate Change and Development in Africa (CCDA 5), according to the organizing committee.
The draft agenda for the conference proposes to adopt a three-prong approach for a comprehensive discussion on the energy nexus of sustainable development as a whole:- the critical role of bio-energy transition and all resulting environmental benefits; opportunities for renewable energy for climate mitigation and resilience; and, the policy and regulatory framework required to unlock transformative financing.
Discussions on the policy and regulatory framework required to unlock transformative financing first came to the fore in Africa in July at a side event organized by ACPC on margins of the Third International Conference on Financing for Development which took place in Addis Ababa from 13 to 16 July 2015.
It would be recalled that during the side event on the theme “Unlocking Transformative Financing for Renewable Energy and Climate Resilience in Africa: From Evidence to Widespread Replication”, Dr. Carlos Lopes, UN Under-Secretary General and Executive Secretary of the Economic Commission for Africa, cautioned that although Africa is well endowed with all forms of renewable energy resources – hydropower, solar, wind, geothermal, biomass and even marine energy, “we cannot achieve structural transformation and inclusive green growth if we do not find sustainable solutions to the current energy deficit.”
“The African region is brimming with resources, and we know that Africa is now home to some of the fastest growing economies. The question is: can the strength of these rising economies, coupled with Africa’s plentiful resources, light up the continent and power Africa’s economies to achieve the industrial transformation that we want,” he asked.
The objective of the discussion was to frame a replicable blueprint that African countries could use to develop strategies for unlocking and catalyzing public-private partnerships, domestic resources, foreign direct investment and climate finance for renewable energy deployment in support of sustainable and inclusive development on the continent beyond 2015.
It highlighted experiences and evidence on the ground on mobilizing transformative financing to invest in low-carbon, climate-resilient development in Africa, building on lessons learned from renewable energy deployment in countries such as South Africa, Ethiopia, Kenya and Rwanda, among others.
Panelist came from the business world, representatives of international financial institutions, UN agencies and think tanks including Mr. Achim Steiner, Executive Director, UNEP; Director, Knowledge, Policy & Finance Centre, IRENA; Hela Cheikhrouhou, Executive Director, Green Climate Fund; Solomon Asamoah, Vice President, Infrastructure, Private Sector & Regional Integration, AfDB; Magnus Asbjornsson, Regional Director, Middle East and Africa, Reykjavik Geothermal Limited; Jacques Moineville Deputy Director General, AgenceFrançaise de Développement; Andrew Norton, Director, IIED; and Simon Zadek, Co-Director of the UNEP Inquiry into the Design of a Sustainable Financial System.
The key messages from the discussion included:
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The energy strategy adopted by African countries is fundamental to how the continent responds to climate change while transforming its economies for inclusive green growth.
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The 22% share of renewable power installed capacity in Africa is remarkably low, given its rich endowments and potential thereof. More African countries need to take immediate steps now and put in place appropriate policy and regulatory frameworks to accelerate the uptake of renewables on the continent, resulting in multiple environmental, social and economic benefits, including those arising from localization of the deployment value chain.
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The energy deficit must be addressed at all scales – from standalone home and off-grid systems to large scale interconnected power grids. Africa’s rich and variedly distributed renewable energy resources provide an opportunity for energy security on the continent through socially inclusive energy corridors and interconnected power systems that optimize the continent’s energy resources in favour of higher shares of renewables.
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Policy coherence, certainty and clarity are essential for investor confidence to ensure that transformative deployment of renewable energy takes off in Africa to close the energy deficit, as demonstrated by oversubscription of South Africa’s recent round of the Renewable Energy Independent Power Producer Procurement Programme.
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Structuring the energy market by governments must be integral to national development plans and will only have tangible results by scaling up across the continent.
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It is vital that administrative and policy bottlenecks are removed to reduce high project transaction costs and reduce the project pipeline on the continent.
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Local financial resource mobilization can play a key role in the deployment of renewable energy and climate resilience projects on the continent as demonstrated by the experiences in South Africa and Ethiopia to date.
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Although feed-in tariffs have played catalytic roles in attracting investments in renewable energy projects, public tenders are having a more transformative impact, resulting in falling prices and value for money.
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The cost of capital for projects in Africa, typically at 15-20% compared to 6-12% in OECD countries is too high – partially attributable to a high level of perceived risks. Reducing this risk level will help accelerate renewable projects on the continent. The Green Climate Fund and other sources of funds could provide pivotal instruments for mitigating these risks.
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In this regard, development banks and DFIs need to up their game and put the “D” in development finance by closing the gap between perceived and real risks on the ground, rather than operating on similar basis as commercial banks.
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Countries need to urgently address the severe lack of capacity in Africa to develop bankable projects, and strengthen the capacities and financial health of national utilities to make them bankable and ready to engage with investors.
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In closing the energy deficit in Africa sufficient attention must be paid to mobilizing substantial investments for sustainable bioenergy development, especially in the context of the energy, food, climate, and land nexus.
Specialists and policy makers going to Victoria Falls will work hard to put some flesh on these messages by way of policy recommendations.
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Amina Mohammed to push for reduced trade tariffs in upcoming WTO meeting
Kenya is rooting for discussions to reduce high tariffs that make trade in agriculture expensive during the coming World Trade Organization 10th Ministerial (WTO MC10) meeting in Nairobi.
Addressing a meeting of African Union Trade Ministers and Africa, Caribbean and Pacific group (ACP) in Brussels last week, Foreign Affairs Cabinet Secretary Ambassador Amina Mohammed said a successful outcome of the WTO (MC10) must include a work programme that is realistic, balanced and that also modernises the WTO negotiating agenda.
The objective of the WTO Nairobi meeting is to reduce distortions in agricultural trade caused by high tariffs and other barriers, export subsidies, and domestic support.
Thus the Ministerial meeting will discuss the Doha Development Agenda (DDA), Agriculture, Market access services among other trade issues with a view of leveraging trade between the Least Developed Countries (LDCs) and the Developed countries.
“The work programme would need to include agriculture, comprising an outcome on cotton; an understanding on food security; services; NAMA; trade and environment; fisheries subsidies; an expanded information technology agreement and a package for LDCs,” Ms Amina said.
Most African countries are classified as least developed countries.
Some of the main areas of interest to LDCs include duty-free quota-free market access; the operationalization of the services waiver; simplified rules of origin; and, cotton.
Some of these issues are remnants from the previous WTO Ministerial Conference, held in Bali, Indonesia in 2013 that were not fully addressed.
Much of the focus at the Bali Conference was on public stockholding programmes for food security purposes in developing countries.
Unfortunately, Ms Amina observed that no progress has been made on achieving a permanent solution to this issue.
“Since the Bali Ministerial Conference, 50 Members have ratified the Agreement of Trade Facilitation that was adopted at the Conference. This is still about 50 short of the two-thirds of Membership required for its entry into force,” she said.
“Unfortunately, no progress has been made on achieving a permanent solution to this issue.”
The main concern is that there has been no progress on the core issues of domestic support and market access on agriculture, non-agriculture market access and services since the launch of the Doha Development Agenda (DDA) round of multilateral negotiations in 2001.
WTO Director-General Roberto Azevêdo outlined the significance of the WTO’s forthcoming ministerial conference when he described the state of play in negotiations, the difficulties in advancing the core Doha Development Agenda (DDA) issues, and some of the potential negotiated outcomes which might be achieved in Nairobi.
“Nairobi is the WTO’s first ministerial conference to be held in Africa since the organization was created in Marrakesh two decades ago. This underlines the importance of delivering outcomes for development,” the WTO Director-General said.
“It seems to me that all members agree that the DDA core issues must remain on the negotiating agenda, such as agriculture, market access, and services.”
He added; “I think there is consensus on that. However there is no agreement on how these negotiations should take place: whether under the present Doha framework, or whether under some new architecture.”
It is therefore unrealistic to expect a significant outcome on the DDA negotiations in December.
This does not mean the Nairobi Conference will be a complete failure. There are indications that Members could find agreement on certain elements.
The main elements of such a potential ‘package’ could include development issues of interest to LDCs; some agreement on export competition in agriculture; and measures to increase transparency in areas such as antidumping, fisheries subsidies and domestic regulation on trade in services.
The meeting was hosted by ACP Secretary-General, Ambassador Patrick Gomes and chaired by Joshua Setipa, Lesotho’s Minister of Trade and Industry.
The Director-General was also joined on the panel by CS Amina, who will chair the 10th Ministerial Conference, and Ambassador Marion Williams as the Coordinator of the ACP Group at the WTO.
Statement by Ambassador Amina C. Mohamed at the AU Informal Ministerial Meeting, 20 October 2015, Brussels – Belgium
I am pleased to address this AU informal meeting once again. I thank the Director-General for his comprehensive report and for the invaluable observations and insights on the way forward in the negotiations on MC10.
As I mentioned yesterday, in just a short while, within just 54 days to be precise, we will be meeting in Kenya for the 10th WTO Ministerial Conference. This Conference is the last of a series of large gatherings this year that have addressed global governance and development issues. It has the potential to deliver concrete gains for all countries.
You have just heard the report by the Director-General on ongoing activities in Geneva. As we heard, there remain serious gaps in the path that we in the African group and the broader membership wish to pursue to ensure that Nairobi delivers the concrete negotiated outcomes to which we all aspire.
While it is encouraging that engagement has not waned in Geneva, it is imperative that we, as Ministers, put all of our political weight behind the intensive efforts that are being made in Geneva and provide the required political direction and guidance. As Nairobi edges closer, political support and clear instructions on our part will be essential in making substantial progress.
The 10th Ministerial Conference is an opportunity to build on the success we achieved in Bali two years ago and to continue strengthening the multilateral trading system. It will not be easy; but difficulties notwithstanding, we need to continue infusing new energy into the WTO negotiations by making steady, incremental progress. A successful Ministerial Conference would be a step in the right direction and would give us the impetus we need to push the multilateral trade agenda forward.
For the Conference to be successful, we have to aim for outcomes that are realistic and acceptable to all Members. Of course, and as we have all agreed, development and LDC issues as well as agriculture, food security, services, NAMA trade and environment and fishery subsidies will have to be core elements of any outcome.
Let me tell you, nonetheless, that I – and I believe other Ministers – have not totally given up on other issues that are of critical importance to us, such as Domestic Support. I am aware that this area has been quite challenging, but I remain optimistic that with a true collaborative effort we may be able to reach a compromise acceptable to all. But this will require a lot of common sense and realism by all of us.
The overall result might not be as comprehensive as many of us are hoping for, but I believe that it can represent a significant step forward from the status quo. A meaningful package of results in Nairobi will ensure that we continue to tackle the key issues of our concern, with the momentum generated, especially on the important unresolved issues.
Therefore, I agree with the Director-General that we also need to start thinking about our work post-Nairobi. We need to instruct our negotiators to work on a draft Ministerial Declaration that recognizes the progress made and gives clear guidance on future work.
This will not be easy – I am aware of the differences in points of view regarding the post-Nairobi work. But I think it is possible to work on something which will be acceptable to all, and which will ensure that we all continue to talk in Geneva after Nairobi.
I believe that we must seize the opportunity that Nairobi offers to deliver a positive outcome for the Organization, and for the future of multilateral trade relations. A “no result” scenario is not a viable option. A successful conference would be the springboard for further progress in the WTO and would pave the way for future discussions at the multilateral level.
If we are not successful this December, we cannot hope to restore credibility to the negotiating arm of the WTO – not now, nor in the future. Nairobi cannot be allowed to fail.
With the countdown clock ticking, we must act with a sense of urgency. While negotiators in Geneva continue to work on the more technical issues, it is imperative for us to provide them with clear political guidance to define – clearly and quickly – the outline of a Nairobi outcome.
Ultimately, it is our responsibility, as Ministers, to ensure that our Conference is successful – it is, after all, a Conference of Ministers responsible for international trade. I am encouraged by the fruitful sessions we had yesterday that culminated in the Declaration on AU position on the outcome of MC10. I am confident we can deliver and the document is crucial in providing direction to our negotiators.
Personally, both as representative of the Kenyan Government and as Chair of the Ministerial Conference, I can reassure you of my full commitment to the success of this Conference. The Kenyan Government – and I personally – are taking our role as MC10 host and MC10 Chair very seriously.
I will continue to reach out to Ministers and I remain available to offer my full support to all of you in the coming months.
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World’s MPs commit to action on digital freedom and fairer migration
Parliamentarians from 137 countries have committed to action aimed at tackling two of the most challenging issues facing the world today – migration and the protection of digital freedoms – as they concluded a global parliamentary conference in Geneva.
Adopting a resolution on democracy in the digital era at the 133rd Assembly of the Inter-Parliamentary Union (IPU), the MPs have set new standards on protecting democracy and digital freedoms in an age of mass surveillance.
The resolution urges parliaments to review national laws to prohibit the interception, collection, analysis and storage of personal data without informed consent of concerned individuals or valid court order.
It underscores the need for privacy protection to be consistent across domestic and international borders, and calls on parliaments to ensure national law cannot be bypassed by data-sharing agreements with foreign States or multinationals.
The 25 point resolution emphasizes the importance of striking a balance between national security and individual freedoms in ensuring that measures taken in the name of national security and counter-terrorism don’t undermine democracy or threaten human rights.
Parliaments are urged to make sure that attempts to curb democratic voices online, including those of journalists and human rights defenders through imprisonment, censorship, hacking or other repressive means are strictly forbidden in national legislation.
Coherent and comprehensive laws to protect whistleblowers in line with international standards are also strongly recommended.
The IPU Assembly, which focused on identifying parliamentary action for a fairer, smarter and more humane migration against a backdrop of a global migration and refugee crisis, outlined a set of measures that MPs could take to protect migrants and maximize the full potential of the world’s oldest human phenomenon.
In a statement adopted at the conclusion of the Assembly, the MPs committed to working towards the ratification of various international conventions that protect migrants’ and refugee rights.
Addressing global and national legislative gaps or grey areas, including the responsibility for searching and rescuing people found in distress at sea or laws on the responsibility for people fleeing environmental disasters was encouraged.
The revision of national laws to ensure access to basic services for all migrants and refugees irrespective of their status, the regulation of the informal sector, particularly the recruitment of low-skilled migrant workers, and the promotion of safe, regular channels for migration, are amongst a wide-ranging set of actions identified by the MPs.
To tackle the growing xenophobia around the world, the MPs acknowledged their responsibility to lead by example in combating stereotypes against migrants, promoting anti-discrimination legislation and in communicating rationally and factually on migration.
“Migration is ultimately an opportunity to positively transform lives, society and economies. We have seen that throughout history. But it has never been easy or without price for the migrant, or the countries of origin and destination,” said IPU President Saber Chowdhury. “This is the most complex challenge of our time. We as parliamentarians must get it right. The potential for positive change that success would bring is incalculable.”
More than 650 MPs, including 92 Speakers and Deputy Speakers of Parliament and 213 women, attended the 133rd IPU Assembly. It was the highest ever percentage (32.6 per cent) of women MPs participating at an IPU Assembly.
Resolution adopted unanomously by the 133rd IPU Assembly
(Geneva, 21 October 2015)
The 133rd Assembly of the Inter-Parliamentary Union,
Recalling the guiding principles of the Charter of the United Nations,
Also recalling the human rights and fundamental freedoms enshrined in the Universal Declaration of Human Rights and relevant international human rights treaties, including the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights,
Further recalling the resolution The role of parliaments in striking a balance between national security, human security and individual freedoms, and in averting the threat to democracy adopted by the 118th IPU Assembly (Cape Town, April 2008),
Noting United Nations General Assembly Resolution 69/166 The right to privacy in the digital age of 18 December 2014,
Also noting the report of the United Nations High Commissioner for Human Rights on the right to privacy in the digital age,
Recalling the United Nations Guiding Principles on Business and Human Rights, and bearing in mind that civil society and business entities can play an important role in either enhancing or diminishing the enjoyment of human rights, including the right to privacy and freedom of expression in the digital era,
Considering that fundamental rights also apply in cyberspace,
Acknowledging the interdependence between democracy and the right to privacy, freedom of expression and information and an open and free Internet, and in view of the universal recognition of the right to privacy, its protection in international law and the expectations of citizens around the world that the right to privacy is safeguarded both in law and in practice,
Also acknowledging that, in the area of digital surveillance, it is not enough simply to adopt and enforce legislation and that procedural safeguards are sometimes weak and oversight ineffective,
Expressing concern that mass surveillance programmes regarding digital communications and other forms of digital expression constitute violations of the right to privacy, including when conducted extraterritorially, and endanger the rights to freedom of expression and information, as well as other fundamental human rights, including the rights to freedom of peaceful assembly and of association, thus undermining participative democracy,
Acknowledging the need for capacity-building, for the empowerment of parliamentarians and parliamentary specialized bodies in the identification of legislative gaps, for the enactment of legislation dealing with the protection of human rights, including the right to privacy, and for the prevention of the violation of such rights,
Affirming the responsibility of parliaments to establish, in line with international principles and undertakings, a comprehensive legal framework to exercise effective oversight of the actions of government agencies and/or surveillance agencies acting on their behalf, and to ensure accountability for all violations of human rights and individual freedoms,
Expressing the need to engage and consult with all relevant stakeholders, including civil society groups, academia, the technical community and the private sector on policy-making related to the digital era,
Acknowledging the importance and expertise of national human rights institutions, non-governmental organizations and human rights advocates, and their role in monitoring, policy-making, consultation and awareness-raising, and welcoming greater cooperation between these organizations and advocates, parliaments and parliamentarians worldwide,
Taking note of the work and contribution of these entities, such as the International Principles on the Application of Human Rights to Communications Surveillance (the Necessary and Proportionate Principles), endorsed by more than 400 non-governmental organizations and the Global Network Initiative,
Affirmng the need for secure and uncompromised systems of communication for the public good and the protection of basic rights,
Considering the findings of the report of the United Nations Special Rapporteur on the promotion and protection of the right to freedom of opinion and expression, on the use of encryption and anonymity,
Recognizing the contribution of parliaments to, and their impact on, decisions facilitating the national and international consensus needed for concerted and effective action on these issues,
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Calls on parliaments to take part in the development and implementation of an overall strategy to enable in the long run the whole population to enjoy the considerable benefits that the Internet can bring to economic, social, cultural and environmental life in order to achieve the Sustainable Development Goals adopted by the United Nations;
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Underlines that this overall strategy should aim both legally and ethically to build a digital ecosystem that is capable of guaranteeing the same rights to all citizens and ensuring that their freedom is effectively protected, particularly in terms of educating all people in digital know-how, and ensuring an equity between actors that will avoid any abuse of a dominant position;
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Underscores that all legislation in the field of surveillance, privacy and personal data must be based on the principles of legitimacy, legality, transparency, proportionality, necessity and the rule of law;
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Calls on parliaments to review their national frameworks and State practices with a view to promoting and increasing public participation and involvement in the digital era, free exchange of information, knowledge and ideas and equal access to the Internet and, with a view to enhancing democracy in the 21st century, encourages parliaments to remove all legal limitations on freedom of expression and the flow of information and to uphold the principle of Net neutrality;
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Urges parliaments to carefully review national laws and the practices of government agencies and/or surveillance organizations acting on their behalf so as to make sure that they comply with international law and human rights, especially as they relate to the right to privacy, and calls on parliaments to guarantee, as part of that review, that private and public companies will not be forced to cooperate with the authorities on practices that impair their customers’ human rights, with the exceptions provided for in international human rights law;
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Calls on parliaments to ensure that national legal frameworks comply fully with international human rights law when applied to interception, analysis, collection, storage and commercial use of data and to share reviews and information from individual States and the IPU on related cases;
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Urges parliaments to review their legislation in order to prohibit the interception, collection, analysis and storage of personal data, including when those actions are of an extraterritorial or bulk nature, without the informed consent of the individuals concerned or a valid order granted by an independent court on grounds of reasonable suspicion of the targets’ involvement in criminal activity;
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Underscores that privacy protections must be consistent across domestic and international borders and calls on parliaments to make sure that privacy protections in national law cannot be bypassed by reliance on secretive and informal data-sharing agreements with foreign States or multinationals;
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Calls on parliaments to enact comprehensive legislation on data protection, for both the public and private sectors, providing, at the minimum, for strict conditions regarding permission to intercept, collect, analyse and store data, for clear and precise limitations on the use of intercepted and collected data, and for security measures that ensure the safest possible preservation, anonymity and proper and permanent destruction of data; and recommends the establishment of independent and effective national data-protection bodies with the necessary power to review practices and address complaints, while further urging parliaments to ensure that their national legal frameworks on data protection are in full compliance with international law and human rights standards, making sure that the same rights apply to both offline and online activities;
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Also calls on parliaments to ensure through legal means that all collaboration on various surveillance programmes between governments and companies, entities and all other organizations is subject to parliamentary oversight, insofar as it does not hamper the conduct of criminal investigations;
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Further calls on national parliaments and governments to encourage the private technology sector to honour its obligations to respect human rights, bearing in mind the Guiding Principles on Human Rights and Business, as customers of these companies must be fully informed of how their data is being gathered, stored, used and shared with others, and further calls on parliaments to promote both global norms on user agreements and more development of user-friendly data-protection techniques which counter all threats to Internet security;
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Urges parliaments to reject the interception of telecommunications and espionage activities by any State or non-state actor involved in any action, which negatively affects international peace and security, as well as civil and political rights, especially those enshrined in Article 12 of the Universal Declaration of Human Rights and Article 17 of the International Covenant on Civil and Political Rights, which states that "no one shall be subjected to arbitrary or unlawful interference with his privacy, family, home or correspondence" and that "everyone has the right to the protection of the law against such interference or attacks";
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Recognizes the need for parliaments to specify, in relative detail, the circumstances under which any interference with the right to privacy may be permitted, to establish strict judicial procedures for the authorization of communications surveillance and to monitor the implementation of those procedures, limits on the duration of surveillance, security and storage of the data collected, and safeguards against abuse;
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Emphasizes that while national security arguments will invariably be advanced that diverse digital technology tools may threaten the security and well-being of a State, parliaments need to review their capacity to oversee all executive action and ensure that a balance is struck between national security and individual freedoms so as to ensure that measures taken in the name of national security and counter-terrorism comply strictly with human rights, and avert any threats to democracy and human rights;
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Strongly urges parliaments to review and establish effective, independent and impartial oversight mechanisms where needed and include them in the legal framework; stresses that parliaments must investigate any shortcomings in their oversight function and the reasons behind them, making sure that their oversight bodies, such as parliamentary committees and parliamentary ombudsmen, have sufficient resources, proper authorizations and the requisite authority to review and publicly report on the actions of government agencies and/or surveillance agencies acting on their behalf, including actions in cooperation with foreign bodies through the exchange of information or joint operations;
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Calls on parliaments to acknowledge that civil society and public participation can play a vital role in monitoring the executive branch and encourages parliaments and parliamentarians to promote and engage in consultation and to welcome assistance from all stakeholders, including national human rights institutions, the private sector, civil society, the technical community, the academic community and users, in their monitoring, policy-making and policy implementation efforts;
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Strongly urges parliaments to ensure that attempts to restrict democratic voices online, including journalists, other media actors and human rights defenders, through imprisonment, harassment, censorship, hacking, illicit filtering, blocking, monitoring and other repressive means are strictly forbidden in national legislation in accordance with international human rights law, treaties and conventions;
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Strongly recommends that parliaments, as part of their oversight function, enact coherent and comprehensive legislation on the protection of whistleblowers in line with international standards and best practices;
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Calls on parliaments to uphold both governmental and corporate accountability for violations of human rights, such as the right to physical and psychological integrity, the right to privacy, freedom of expression and other individual freedoms, so that such accountability includes adequate sanctions to ensure justice and to act as a deterrent, including criminal prosecution, administrative fines, suspension or withdrawal of business licences, and the payment of reparation to individuals for harm caused;
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Also calls on parliaments to ensure that the necessary legal and administrative measures are taken to combat trafficking in persons perpetrated through the Internet, and to combat gender-based harassment and cyber-violence that targets, in particular, women and children;
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Underscores the right to effective remedy for victims of violations of the right to privacy and other individual freedoms and calls on parliaments to provide for procedural safeguards in law, thereby facilitating access to duly implemented remedies;
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Strongly urges parliaments to enable the protection of information in cyberspace and associated infrastructure, so as to safeguard the privacy and individual freedom of citizens by developing formal as well as informal cooperation and relationships among nations to exchange information and share experiences; further calls on parliaments to carry out technical and procedural cooperation as well as to collaborate in order to mitigate the risk of cyber-crimes and cyber-attacks and, in this context, to modernize mutual legal agreements so as to address the multidimensional challenges of the digital era, including speed of response;
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Welcomes the appointment of the United Nations Special Rapporteur on the right to privacy and calls on the IPU to initiate a dialogue with him as well as the United Nations Special Rapporteur on the promotion and protection of the right to freedom of opinion and expression, the United Nations Special Rapporteur on the situation of human rights defenders and the United Nations Special Rapporteur on the promotion and protection of human rights and fundamental freedoms while countering terrorism, and to work with them to produce a compilation of best legislative practices in this field;
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Calls on Parliaments to ensure that their respective governments cooperate fully with the United Nations Special Rapporteurs on the right to privacy, on the promotion and protection of the right to freedom of opinion and expression, on the situation of human rights defenders and on the promotion and protection of human rights and fundamental freedoms while countering terrorism, including in relation to challenges arising in the digital age; invites parliaments to keep themselves informed of the Rapporteurs’ recommendations, and to provide the necessary legislative framework for their implementation, as appropriate;
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Invites the IPU to develop – in cooperation with relevant stakeholders, including international and regional organizations, civil society and human rights experts – capacity-building programmes for parliamentary bodies tasked to oversee observance of the right to privacy and individual freedoms in the digital environment.
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Economic and Social Council President urges curtailing flow of illegal finances that cost Africa billions
In a “timely and necessary” meeting on illicit financial flows and their impact on development in Africa, Oh Joon, President of the United Nations Economic and Social Council (ECOSOC) on 23 October 2015 urged broader efforts to combat such flows, of IFFs from the continent could amount to a staggering $50 billion each year.
“Today’s deliberation on illicit financial flows in Africa is both timely and necessary. It is necessary because reducing illicit financial flows and their costs for African economies is a challenging task, calling for cooperation at all levels and among many different actors,” said Mr. Oh.
Addressing a joint meeting of ECOSOC and the General Assembly’s Second Committee – which deals with economic and financial issues – he stressed that African countries will need international and regional support, including public-private dialogue, amidst the transformation of its economies and balancing critical economic needs with social and environmental sustainability.
He also added that African nations will need to finance a wide range of investment requirements in order to achieve the recently adopted 2030 Agenda and its 17 Sustainable Development Goals and therefore, would require the biggest portion of financial resources.
“The UNCTAD World Investment Report of 2014 and other sources have highlighted that investment needs in developing countries alone range from 3.3 trillion dollars 4.5 trillion dollars per year, mainly for basic infrastructure such as roads, rail and ports, power stations, water and sanitation, food security, climate change mitigation and adaptation, health, and education,” said Mr. Oh.
He also said that according to UN Economic Commission for Africa (ECA), nearly $50 billion of illicit financial flows move from the continent, which represents an important loss of foreign exchange reserves, an erosion of their legal tax base, and bygone investment opportunities from natural resources rents.
He stressed that Africa have to mobilize its resources from within the continent and decide on how best to retain and utilize them effectively.
Preventing Illicit Financial Flows in Africa Focus of Joint Second Committee, Economic and Social Council Meeting
Introduction
The Second Committee, in a joint meeting with the Economic and Social Council, on Thursday morning held a panel discussion on “illicit financial flows and development financing in Africa”. The event, chaired by Andrej Logar (Slovenia), featured Oh Joon, President of the Economic and Social Council, who delivered opening remarks, and James Zhan, Director of Investment and Enterprise, UNCTAD, who made introductory remarks by video link. The panellists were: Mothae Maruping, Commissioner for Economic Affairs of the African Union; Amr Nour, Representative of the Economic Commission for Africa (ECA); James Boyce, Professor at the Department of Economics, University of Massachusetts at Amherst; Erika Dayle Siu, Independent Commission for the Reform of International Corporate Taxation; Junior Roy Davis, Economist, Division for Africa, Least Developed Countries and Special Programmes at UNCTAD; and, Shari Spiegel, Chief of the Policy Analysis and Development Branch, United Nations Department for Economic and Social Affairs.
Opening Remarks
Mr. LOGAR said that the fourth Joint African Union Conference of Ministers of Economy and Finance and ECA, Conference of African Ministers of Finance, Planning and Economic Development, held in 2011, had mandated the ECA to establish a High-level Panel on Illicit Financial Flows from Africa. After a rigorous investigation, the Panel had concluded that combating such flows was no longer a choice; it had become an imperative. The Panel report had called upon the African Union to engage with its partner institutions to elaborate on a global governance framework to determine the “conditions under which assets are frozen, managed and repatriated”.
Calling on delegates to reflect how the United Nations could assist African countries in tackling illicit financial flows, he added that it was important to discuss how the Organization could stimulate greater global cooperation and coordination among the entities involved at tackling such flows, be it Governments, donors, financial institutions or international organizations. Other questions included how best to streamline the many new initiatives that were taking place such as the Organisation for Economic Cooperation and Development (OECD) Action Plan on Base Erosion and Profit Sharing or the World Bank Stolen Asset Recovery Initiative.
Mr. OH stated that African countries were fundamentally transforming their economies and had to finance a wide range of investment requirements in order to achieve their multiple economic and social goals, such as creating jobs, reducing poverty, combating inequality, empowering women and achieving sustainable development. The UNCTAD World Investment Report 2014 and other sources had highlighted that the total investment needs in developing countries in the key sectors would be in the range of $1 trillion every year, for the next 15 years.
Like other regions, he continued, Africa would have to mobilize resources from within the continent, and the illicit outflows of finance represented an important loss of foreign exchange reserves, an erosion of legal tax base and bygone investment opportunities from natural resource rents. With an estimated $50 billion per year in illicit financial flows, the effectiveness of domestic resource mobilization would be significantly curtailed if such illicit flows continued.
Panel Discussion
Mr. ZHAN, via video link from Geneva, said that tackling illicit financial flows was essential for Africa to achieve the Sustainable Development Goals. The estimated resources leaving Africa in the form of illicit financial transfers was nearly $530 billion between 2002 and 2012. That was a huge cost for the continent’s development as those resources could have been invested into Africa’s economic development and structural transformation. Illicit financial flows undermined institutions, drained the State of much needed economic resources, reduced the development resource base and led to higher domestic tax burdens to fill the resource gap. Serious governance was needed to address that issue, particularly in the area of natural resources revenue.
Africa was the only region where illicit financial flows reached about 5 per cent of GDP, he said, urging the promotion of transparency and accountability through the strengthening of civil society. Promoting institutional reforms and creating anti-corruption commissions were critical. African Governments had a big responsibility to tackle the problem but so did the international community. African countries could not do it alone, he said, calling for greater regional cooperation. Multinational companies and foreign direct investment (FDI) were also an important part of the solution. United Nations agencies such as UNCTAD could offer advice to African Governments to design investment policies and handle tax avoidance and illicit practices by multinationals.
Mr. MARUPING said that dealing with illicit financial flows had become even more pressing for developing countries as the task of financing the Sustainable Development Goals loomed on the horizon. Africa was by far the “greatest loser”, as illicit financial flows from the continent composed a much larger percentage of GDP than any other region. The continent was aspiring for transformative economic growth, human development and the eradication of poverty. As early as 2011, the African Union had formed the High-level Panel to probe the illicit financial flows from Africa. While come challenges could be overcome in the short terms, others were in the long term.
Africa could not effectively tackle illicit financial flows on its own, he continued. Recalling that paragraph 24 of the Addis Ababa Action Agenda provided the basis for the Second Committee of the General Assembly and the Economic and Social Council to enter the arena, he urged the Committee to establish a panel of experts to carry the endeavour forward. Further, the Economic and Social Council should consider activating the Vienna Commission on Crime Prevention. Illicit financial flows should remain at the centre of the radar screen of both bodies.
Mr. NOUR said that illicit financial flows were not only an African problem but a global one. Those transactions represented a huge transfer of financial resources out of developing countries. Capturing those “hidden resources” could help fund development. The impact of illicit financial flows was particularly felt in Africa, as in some countries those transactions reached up to 16 per cent of GDP. He expressed serious concern over the high levels of poverty, saying that the number of people living on less than $1.25 a day increased from 290 million in 1990 to 414 million in 2010. Africa was conservatively estimated to be losing more than $50 billion annually to illicit financial flows.
It was also important to hold accountable any corporations that participated in illicit financial flows, he said. Capacity-building was crucial in the context of the 2030 Agenda. He expressed support for data collection and the preparation of a document to be made available to all African countries on operational measures to adopt policies against illicit financial flows. It was important to learn from past experiences, he said, pointing to Bolivia, which had reached an estimated $287 billion in revenue from its hydrocarbon industry in 2004. By 2008, revenue skyrocketed to $1.6 billion through the renegotiation of contracts. He called for political will and commitment by the African Union, a “development lens” to address the illicit financial flows, and upscaling regional and international cooperation.
Mr. BOYCE said that while “capital flight” and “illicit financial flows” were used interchangeably, they were distinct concepts, with the first usually defined as unrecorded capital outflows and measured as the missing residual in the balance of payments. The broader universe of illicit financial flows included not only capital flight but also payments for smuggled imports, transactions connected with illicit trade in narcotics and other contraband, outflows of illicitly acquired funds that were domestically laundered before flowing overseas through recorded channels and transfer pricing by the corporate sector.
Turning to policy responses, he said there had been some success in efforts to recover and repatriate stolen assets, as for instance with the $700 million held in Swiss bank accounts by Nigeria’s former military ruler Sani Abacha and his family. Over the past two decades, the international community had begun building institutional infrastructure to assist in stolen asset recovery. As a result, when investigators identified substantial foreign holdings of politically exposed persons and others suspected of criminal activity, asset holders could be required to prove that the wealth was acquired legitimately. The creation of an impartial body to adjudicate cases of odious debts would further strengthen that international architecture.
Ms. SIU said that 60 per cent of illicit financial flows were attributable to commercial trade transactions, and further losses were caused through corporate tax avoidance. Developing countries alone lost $100 billion annually and the International Monetary Fund (IMF) had estimated that they lost three times more than developed countries. At the same time, corporate tax rates in all economies had dropped significantly. Recalling the report of the Special Rapporteur on extreme poverty and human rights, she added that “tax abuse is not a victimless practice”, and it limited the resources that could be spent on reducing poverty and realizing human rights.
Tax abuse by multinational corporations, she added, also increased the tax burden on other taxpayers. The world had changed and so must its tax system. The current international tax framework was developed in the 1920s when cross-border trade occurred in commodities. Today, nearly half of global GDP came from economic activity in developing countries and services dominated over goods. Noting with concern that only three African countries had transfer pricing units in their internal revenue services, she added that capacity-building at the national level was a start, but international tax cooperation and global governance were essential. Rather than taxing a multinational corporation’s subsidiaries as separate entities, a corporation should be taxed as a single and unified entity. Further, developed countries should establish a minimum corporate income tax.
Mr. DAVIS said regulations must be developed both for transparency of trade and financial flows. The issue of illicit financial flows was exacerbated by a lack of harmonization in the area of regulating financial services. That was particularly a reflection of a lack of skills and capacity to maintain oversight. Regional integration was key and could be seen in East Africa in the management of financial regulation and institutions. He also emphasized the importance of technical assistance, including automated systems of data to allow better monitoring of trade mispricing and export and imports. Those measures allowed information to be exchanged more swiftly. Unfortunately, commodity dependence was growing over the last decade, rather than declining, and countries that depended on resource revenue exclusively were most affected by illicit financial flows. That posed huge losses for development.
As much as 15 per cent of GDP of some countries had been lost and as a consequence, many African countries were returning to the international capital markets for funds. Illicit financial flows expanded dependence on external financing, and hindered and reduced the potential for future fiscal and export revenues throughout the continent. Government leadership, regional action and vision were critical to address that. Countries had to shift from dependence on raw commodities to high-value added goods and services. If well-managed, Africa’s mineral resources could catapult the continent into unlimited growth. African Governments would need to engage multinational organizations to reinvest in local communities to aid the development on the ground.
Ms. SPIEGEL said that the fact that there was a discussion about illicit financial flows represented a real change in policy. A wide range of issues had been discussed, from transparency to budget issues; from corruption to investment to debt. Many of those items had also been discussed in the Addis Ababa Action Agenda, including the importance of capacity-building to tackle illicit financial flows. As a result, there was already international agreement on combating the problem. While international financial institutions must provide support to countries tackling illicit financial flows, it was not clear exactly how such flows could be tracked, since, by nature, they were illicit. At the same time, it was important to agree to a single definition of illicit financial flows.
The flip side, she added, was that, given the wide breadth of issues covered under the term, it was important to address them separately. While there should be synergies, the actual policy adjustments needed to be tailored to specific problems. Turning to investment, she noted that a lot of the money leaving developing countries illicitly could be invested domestically. Even if the problem of illicit financial flows was solved, that money might not go to the areas where financing was needed. Therefore another important challenge was how to incentivize that money to go into areas of public investment. A good place for that discussion could the Financing for Development Forum.
Interactive Dialogue
When the floor was opened up, the representative of the United Kingdom said that action on tackling illicit financial flows should not be delayed as a clear commitment had been outlined in the Addis Ababa Action Agenda. On a national level, the United Kingdom had taken action to toughen anti-laundering policy, investigate citizens committing bribery and strengthen the capacity of tax authorities. It was important to address how recovered money was used and focus on coordinating efforts. On asset recovery and rapid response capability, the United Kingdom had to deal recently with a number of complicated cases, namely in the Arab Spring and with the conflict in Ukraine, he said, urging the establishment of an international asset recovery body. Mr. BOYCE agreed that there was a need to develop an internationally coordinated mechanism. Institutional innovation was absolutely necessary, he said, including in the area of adjudication of odious debt, which was not the same as debt forgiveness. It meant challenging the legitimacy of the subset of debt which could be identified as illegal under international law. Africa should not be asking for debt forgiveness, rather the creditors to that continent should be asking the people of Africa to forgive them for lending debt that did not benefit the people, but only corrupt rulers.
The representative of Liberia said that countries that were the destination for the outflows of funds also had a responsibility to help Africa repatriate those flows. He asked what actions the African Union had taken as its primary responsibility was the economic and social development of the continent, as well as how illicit flows had increased even though the international community had given the issue more attention. Mr. MARUPING said that illicit financial flows exacerbated inequalities and that was a pressing issue that needed to be addressed soonest. Mr. NOUR said that many developing countries were net creditors to developed countries. As it stood now, many of the global initiatives could not be implemented because technically countries were not able to do so.
Lesotho’s delegate said that criminal activities seemed to have been committed in developing countries by corporations from the developed world and yet “the victim has to take the action for the solution and not the countries where the criminal activities are coming from”. He said there were proposals from the United States included in one of the panellist’s presentations and the United Kingdom had also taken to the floor but mostly the message was that poor African countries had to resolve the problem themselves. He asked whether developing countries would ever be able to extradite individuals responsible for corruption in their countries so that they could be prosecuted. He pointed to a case where Lesotho could not prosecute criminals because they were being protected by their Governments. Addressing Lesotho’s query, Mr. BOYCE said that destination countries had grave responsibilities in addressing the problem of illicit financial flows and must go beyond their roles as safe havens. The role of the destination countries was more than just “where the money goes”. It was a huge mistake to put all the responsibility on African countries.
The representative of Ethiopia underscored the importance of inclusive economic growth to broaden the tax base and revenue. The many legal loopholes that multinational corporations could take advantage of made it impossible to argue that something was unethical and downright illegal, he said. Ms. SIU emphasized that the issue of legal loopholes was central to governance. Corporations had lobbied strongly and invested a lot of money to create loopholes to work in their favour. It would take the role of the Government, the private sector and civil society to tackle such loopholes. Mr. DAVIS said that tackling the leakage of resources from countries was hindered by tremendous capacity constraints. It was a challenge both nationally and regionally, therefore the United Nations would be critical in assisting in those efforts.
The representative of the United Republic of Tanzania said that without examining tax havens it would be difficult to curb illicit financial flows. Sudan’s delegate highlighted how illicit financial flows were a critical problem in her country and called for greater regional coordination to deal with that.
The representative of the United States pointed to the fundamental difference between criminal activities and a lack of policy. Having good laws and effectively implementing them was critical to addressing illicit financial flows, he said, pointing to initiatives his country was involved in. At the international level, standards and regulations complemented such efforts, he said.
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tralac’s Daily News selection: 23 October 2015
The selection: Friday, 23 October
ACP Declaration on the 10th WTO Ministerial Conference
We re-affirm that the ACP Group of States will continue constructive engagement in the pursuit of a meaningful outcome at the Tenth WTO Ministerial Conference (MC10) in Nairobi, and that such engagement is predicated upon adherence to the following principles:
Decisions are taken through a transparent, inclusive, and consensus-based Member-driven process
Agreement on a development package taking into account the concerns and interests of all ACP States
Affirmation of the development objectives of the DDA in all aspects of negotiating outcomes, including the principle of special and differential treatment and less than full reciprocity
Agreement in Nairobi reaffirming WTO Members’ commitment to conclude the DDA in line with its development mandate
LDC proposal on rules of origin triggers mixed reactions (Bridges Africa, ICTSD)
The EU’s new trade strategy paints a “redefined” relationship with Africa (Bridges Africa)
The AU and EU re-affirm commitment to strengthen partnership (AU)
The future of the WTO: implications for South Africa's agribusiness sector (AgBiz)
Xenophobia abhorrent to regional integration (UNECA)
Xenophobia and regional economic integration are contradictory. Without the free flow of people, goods and services, there can never be regional integration or building a community of regional citizens. These observations were made at the southern Africa inaugural seminar series hosted by ECA Southern Africa office in partnership with the African Peace-building Network of the Social Science Research Council in Livingstone. The seminar was held under the theme of Conflict, Peace and Regional Economic Integration in Southern Africa: Bridging the Knowledge Gaps and Addressing the Policy Challenges. [The Livingstone Declaration]
Ensuring everyone’s right to nationality: the role of parliaments in preventing and ending statelessness (26-27 November, Cape Town, IPU and partners)
The Committee on Regional Cooperation and Integration (7-9 December, Addis Ababa, UNECA)
The ninth session will therefore have as its theme “Enhancing Productive Integration for Africa’s Structural Transformation” and thus provide a platform for member States to deliberate on this topical and important issue, including ways and means of promoting and accelerating productive integration and its ancillary components of trade and market integration, economic diversification, competitiveness, infrastructure, regional and continental value chains development, and the financing and investments needed to meet these strategic objectives. [Aide-memoire]
Africa and Latin America at a crossroads: addressing structural transformation in a new global landscape (ECA-ECLAC-GIZ-OECD Development Centre Policy Dialogue)
Africa’s demographic transition: dividend or disaster? (World Bank)
The population in Africa is rapidly expanding, and by 2060 the region will hold an estimated 2.8 billion people. With the right policies and actions, countries in Sub-Saharan Africa can reap a tremendous demographic dividend from this growth to propel an economic takeoff, according to a new World Bank report. The report, Africa’s Demographic Transition: Dividend or Disaster? notes that demographic change such as population growth and a reduction in the number of dependent youth, can have a deep impact on a country’s economic growth and the well-being of families. The report lays out an agenda for African countries that can increase the likelihood of capturing the potential social and economic benefits from population growth to create a demographic dividend in Sub-Saharan Africa. At the same time, it poses a challenging dilemma if the right policies and actions are not implemented judiciously.
Slowdown in 2015 migrant remittances forecast (World Bank)
Weak economies in Europe, especially Russia, are slowing the growth of remittance flows in 2015. Weaker currencies vis-à-vis the US dollar, and lower oil prices are further restricting the ability of many migrants to send money back to family and friends, according to the World Bank’s latest Migration and Development Brief. Remittances to developing countries are expected to reach $435bn in 2015, registering a modest growth rate of 2% from last year. This represents a significant slowing in the growth of remittances from the rise of 3.3% in 2014 and of 7.1% per year from 2010-13. Global remittances, sent home from some 250 million migrants, are projected to grow by 1.3% to $588bn. [Blog]
SSA remittance trends: The projected 0.9% rise in remittances to Sub-Saharan Africa in 2015 represents only a small improvement from 0.4% growth in 2014. Remittances to Nigeria, which accounts for around two-thirds of total remittance inflows to the region, are expected to decline by 0.3%, to roughly $20.8bn in 2015. Regional growth in remittances in 2015 would largely be driven by strong remittance growth in South Africa (9.8%) and Kenya (9.1%). Ethiopia and Uganda are expected to show moderate growth in remittances (1.8% and 2.3%, respectively), while remittances are expected to remain flat in Senegal. The growth rate of remittance flows to the region is projected to rise to 3.3% and 3.7% in 2016 and 2017.
The level of remittance dependency varies across countries. Remittances to Liberia, the Gambia, Lesotho, and Comoros are almost a fifth of GDP. Remittances also finance a substantial share of imports in some of the larger countries; for example, in 2014 remittances financed around one-fourth of imports in Nigeria and about one-fifth in Senegal.
African Institute for Remittances: update (AU)
Securitise Diaspora remittance to fund agriculture (NewsDay)
Zimbabwe has to securitise remittances from the Diaspora and channel the proceeds into agriculture and infrastructure development, Reserve Bank of Zimbabwe (RBZ) deputy governor, Kupukile Mlambo, has said. Speaking to NewsDay on the side-lines of an agriculture financing meeting involving ministers of Agriculture and Finance, central bank governors and banks on Wednesday, Mlambo said innovative approaches have to be made to make use of Diaspora remittances, which are going towards consumption.
Zimbabwe: Letter of Intent and Technical Memorandum of Understanding (IMF)
We are fully committed to achieving a balanced primary fiscal position but the revenue shortfalls make it difficult this year. Nevertheless, we intend to lower the primary deficit to below 0.5% of GDP and aim at a balance in 2016. The shortfall reflects the country’s widespread economic difficulties, shrinking corporate profits and earnings, limited ability of companies to pay taxes on time, and an increasingly informal economic activity.
Kenya: Letter of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding (IMF)
The current account deficit widened to 10.4% of GDP in 2014, reflecting sizable imports of capital equipment and an acceleration of external services imports. On the other hand the capital and financial flows recorded net inflows amounting to 12.5% of GDP in 2014, resulting in overall balance of payments surplus of about 2.2% of GDP, compared with 2.5% under the original program projections. That said, economic policy management and implementation of reforms under the program has been affected by the onset of external and domestic shocks.
Tanzania: Manufacturing overtakes gold in generating forex (The Citizen)
The manufacturing sector has overtaken gold in generating foreign exchange earnings. That has raised hopes to industry players that the sector is in the right direction to support Tanzania’s economy. According to the Bank of Tanzania’s September economic review, manufacturing generated $1.31bn in the year ending August while gold had $1.29bn. Manufacturing becomes second after tourism which generated $2.21bn. [September MER]
East Africa: New law to stop timber smuggling (The Star)
A proposed law by the East African Legislative Assembly seeks to stop smuggling of forest products like timber and sandalwood across the region. The Bill provides regulations for management and protection of national forests and trans-boundary ecosystems and seeks to regulate trade in forest products. The EALA is now partnering with East African Farmers Federation and the Centre for International Forestry Research to amend some clauses in the EAC Forest Management and Protection Bill 2015.
Egypt: Importers worried (Ahram Weekly)
Reducing Egypt’s spending on imports is a priority on the new cabinet’s agenda. This follows President Abdel-Fattah Al-Sisi’s urging that the government rationalise the country’s imports bill in an attempt to take pressure off Egypt’s shrinking foreign currency reserves. Business organisations expressed their concerns regarding the government’s approach to reducing imports. A statement issued by the Federation of Egyptian Chambers of Commerce said: “On Egypt’s way to achieving its road map, voices have emerged calling for the application of polices that will close the market and make investors flee Egypt.”
India’s trade footprint in Africa (Emerging Powers Fahamu)
The Associated Chambers of Commerce and Industry of India report on African trade issues (Emerging Powers Fahamu)
India set to float global solar power alliance during Africa summit (Hindustan Times)
WEDF: Enabling trade through sustainable development and innovation (ITC)
Freight rail link between Uganda, Dar in offing (Daily Monitor)
Form alliances to save airlines, Boeing tells Africa (Daily Nation)
Boeing torn between Kenya and Ethiopia offices (Business Daily)
World Bank statement on Commission of Inquiry into Uganda National Roads Authority
FRSC to comply with ECOWAS policy on axle load enforcement (PM News)
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ACP Group Declaration on the Tenth WTO Ministerial Conference (MC10)
Preamble
We, Ministers of the African, Caribbean and Pacific (ACP) Group of States responsible for trade matters, meeting in Brussels from 19 to 21 October 2015 to, among other things, review preparations for the Tenth WTO Ministerial Conference (MC10) in Nairobi and provide political guidance to our Member States;
Recalling the WTO Ministerial declarations adopted at Doha, in 2001, Hong Kong, in 2005, and Bali, in 2013, and the General Council Decision adopted on 1 August 2004, and the guidance provided by Ministers at the Eighth WTO Ministerial Conference, in 2011;
Recalling and reaffirming all of the ACP Declarations, adopted since 2001, for previous WTO Ministerial Conferences and the respective outcomes of ACP and G90 Trade Ministers meetings as well as the ACP Group of States positions on the negotiating issues;
Emphasising the need for priority attention to be accorded to Least Developed Countries (LDCs) in order to facilitate their full integration into the multilateral trading system;
Noting that within the ACP Group of States, developing countries include, but are not limited to, LDCs, Small Island Developing States (SIDS), Small Vulnerable Economies (SVEs), Landlocked Developing Countries (LLDCs), Preference Dependent Economies, Net Food Importing Developing Countries (NFIDCs), Low Income Countries (LICs), Middle Income Countries, Highly Indebted Poor Countries (HIPC), Heavily Indebted Middle Income Countries (HIMICs), limited commodity exporting countries, and countries in war, post-conflict, and post-natural disaster situations;
Further recalling the SIDS Accelerated Modalities of Action (SAMOA) Pathways emanating from the Third International Conference on SIDS;
Concerned that some proposals introduced in the negotiations may undermine the development objectives of the Doha Development Agenda (DDA);
Further concerned about potential erosion of gains made as a result of graduation of some ACP States;
Emphasising, the need for Members of the ACP Group of States to secure a meaningful share of world trade and to increase their competitiveness;
Recognizing the importance of targeted and sustainable financial, technical, and capacity building assistance programmes to support the ACP Group of States to implement their agreements, to adjust to the reform process, and to benefit from opportunities presented;
Determined to work towards conclusion of the DDA, taking fully into account the development objectives set out in the Doha Declaration and the Marrakesh Agreement Establishing the WTO;
Hereby adopt the following common position in the context of the forthcoming Tenth WTO Ministerial Conference (MC10) in Nairobi, and thereafter:
Principles
1. We reaffirm that the ACP Group of States will continue constructive engagement in the pursuit of a meaningful outcome at the Tenth WTO Ministerial Conference (MC10) in Nairobi, and that such engagement is predicated upon adherence to the following principles:
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Decisions are taken through a transparent, inclusive, and consensus-based Member-driven process;
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Agreement on a development package taking into account the concerns and interests of all ACP States;
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Affirmation of the development objectives of the DDA in all aspects of negotiating outcomes, including the principle of special and differential treatment and less than full reciprocity; and
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Agreement in Nairobi reaffirming WTO Members’ commitment to conclude the DDA in line with its development mandate.
Development Decisions in Nairobi
2. We urge Members in Nairobi to deliver on the following proposals in favor of developing countries and submitted by them:
(i) Ministerial affirmation that, in the course of future negotiations in agriculture and non-agricultural goods, the flexibilities, for LDCs and SVEs so far, will be maintained as a starting point and the inclusion of flexibilities for members of customs unions;
(ii) Affirmation that developing Members with low binding coverage of non-agricultural goods tariff lines[1] will be exempt from making tariff reductions consistent with the objectives of Rev.3; and countries covered in paragraph 13 of Rev.3;
(iii) Affirmation that the level of ambition for any of the flexibilities shall be adjusted commensurate with the level of ambition in the negotiations as a whole;
(iv) Ministerial affirmation of the agreed flexibilities for developing countries in the services negotiations found in GATS Articles IV and XIX; the Negotiating Guidelines and Procedures; and the Hong Kong Declaration, including Annex C, including those specifically for LDCs; which do not contain any concept of reciprocity in the content of offers and Procedures; and further affirmation that these flexibilities shall not be undermined by new proposals;
(v) Concrete and binding decisions in the areas put forward by LDCs;
(vi) Binding decisions in accordance with Doha Declaration paragraph 44, on the twenty-five DDA special and differential treatment agreement specific proposals submitted by the G90[2];
(vii) A decision on the disciplines on fisheries subsidies that impact the food security of developing countries and fish resources, as referenced in JOB/TNC/46, representing a minimum package for development toward achieving the targets set out in Agenda 2030 SDG 14, while at the same time ensuring that such disciplines would not consign developing countries, especially SIDS, which will need subsidies for their expansion, to only artisanal and small scale fishing;
(viii) Commitment that the application of flexibilities that are not linked to the tiered formula in agricultural market access to developing countries shall be maintained;
(ix) Agreement on the extension of the transition period under Article 66.1 of the TRIPS Agreement for LDC Members for certain obligations with respect to pharmaceutical products which expire in December 2015 and waivers on Articles 70.8 and 70.9 requested by the LDC Group in document IP/C/W/605;
(x) A concrete and binding decision on cotton;
(xi) A substantial reduction in trade distorting domestic support, in particular by developed countries;
(xii) Affirmation that different tariff reduction targets should be defined for developed countries, developing countries, and SVEs in accordance with the principles of special differentiated treatment and less than full reciprocity, and confirming that LDCs shall be exempt from making tariff reductions;
(xiii) Agreement on the G33 proposal for procedures to operationalize the Special Safeguard Mechanism that was agreed in the July Framework 2004;
(xiv) Agreement on Special Products ; and
(xv) Examination of all types of NTBs in developed country markets impacting on developing country exports.
Other aspects for MC10 and the DDA Negotiations
3. We call upon Members to affirm their commitment to the DDA and its mandates, in particular on core areas of importance to developing countries.
4. We emphasise that future negotiations on agriculture and NAMA tariff cuts must be commensurate with meaningful cuts in domestic support and that flexibilities shall be accorded to developing countries, especially LDCs and SVEs.
Agriculture
5. We acknowledge that agriculture is of critical importance to the economies of the majority of the ACP Group of States and therefore reaffirm that special and differential treatment for developing countries shall be an integral element of the agricultural negotiations, taking into account the possible negative effects of non-implementation of commitments by developed countries on ACP States.
6. On domestic support, we reiterate the importance we attach to achieving meaningful cuts in Overall Trade Distorting Support (OTDS), Aggregate Measurement of Support (AMS), and disciplines to prevent box shifting. The AMS and de minimis flexibilities for developing countries, in particular LDCs, SVEs, and NFIDCs in accordance with Rev.4, should be preserved and the integrity of Article 6.2 of the Agreement on Agriculture shall be maintained.
7. On export competition, as per Rev.4, we reiterate our support for the progressive and parallel elimination of all forms of export subsidies and export measures with equivalent effect, including in the area of food aid, while taking into account problems faced by developing countries, and urge that the flexibilities currently envisaged in existing texts be maintained including those for LDCs and SVEs.
8. On Public Stockholding for Food Security Purposes, we call on Members to work expeditiously towards finding an appropriate permanent solution.
Non-Agricultural Goods Market Access (NAMA)
9. We reaffirm the need to preserve in the NAMA negotiations, at minimum, the core flexibilities contained in Rev.3 that fully take into account ACP States development priorities and that LDCs shall be exempted from taking any tariff reductions. With respect to the current NAMA tariff reduction formula; we note that, many WTO Members, including ACP States, have stated that the Swiss formula is not do-able.
10. We also reiterate the need for any agreement to include treatment of preference erosion.
11. In continued negotiations, we urge that tariff reduction for those developing Members that are part of a customs union of developing countries which may include LDCs and SVEs shall be no more than the average tariff reduction of all the other Members of the customs union and shall in no case result in final tariffs that are below the Common External Tariff. The tariff reduction commitments shall also be moderated to avoid widening divergences in tariff bindings amongst the Members of such customs unions.
12. With respect to non-tariff barriers, WTO Members should refrain from imposing measures on trade from ACP States, that amount to discriminatory or unnecessary barriers to trade. Technical assistance should be provided to support developing country initiatives aimed at ensuring ACP participation in relevant standard setting processes and to address other non-tariff barriers to trade.
Services
13. The ACP Group of States identified non-exhaustive sectors and modes of supply of interest to our Members in JOB/TNC/46.
14. We recall that Members may decide how to proceed on their own offers taking into account their particular development objectives and offers from other Members. At the same time we reiterate key principles and flexibilities embedded in the General Agreement on Trade in Services, the Negotiating Guidelines and Procedures, the Hong Kong Ministerial Declaration and its Annex C.
15. In domestic regulations negotiations, we recall that developing countries have the flexibility in their own discretion with regard to taking on any new commitments, consistent with their right to regulate and development policy objectives. To further the development component of the DDA, developed Members should take on commitments in qualification requirements and procedures to facilitate developing country services market access. We also call upon Members to reaffirm that LDCs shall not be required to take on any new commitments.
Trade-related Intellectual Property Rights Negotiations
16. The ACP Group continues to support TRIPS negotiations on the basis of proposals contained in TN/C/W/52.
Least Developed Countries
17. We urge Members to take note that LDCs share in world merchandise and services trade is miniscule and they suffer staggering current account deficits. Therefore, we emphasise the need for value-added and binding decisions based on proposals from the LDC Group, to be taken at the Tenth WTO Ministerial Conference (MC10) in Nairobi as a matter of priority toward the real and greater integration of the LDCs into the multilateral trading system.
Regular Work of the WTO
18. WTO mandates in areas of interest to the ACP Group of States, should be reinvigorated, in particular the development component across all on-going work programmes and deliberations in the relevant WTO bodies.
Small and Vulnerable Economies
19. We reaffirm Paragraph 35 of the Doha Declaration and paragraph 41 of the Hong Kong Ministerial Declaration. We urge the WTO Membership to continue to address, in a substantive and meaningful manner, the particular structural disadvantages and inherent vulnerabilities of small, vulnerable economies and call for due regard to be given to the priorities of SVEs in all areas of the negotiations to ensure their further integration into the multilateral trading system. We also reiterate that the WTO must deliver flexibilities for SVEs as part of any development outcome.
Accessions
20. We welcome the recent accession to the WTO of ACP State, the Republic of Seychelles, and applaud the completion of the accession negotiations for ACP State, Liberia.
21. Acceding ACP States should make concessions commensurate with their size and development needs and current WTO rules and standards. We urge the WTO and developed countries to provide technical assistance and resources to support acceding ACP States in the process of accession negotiations. In addition, we urge the implementation of the General Council's Decision of 25th July 2012 on Accession of LDCs aimed at strengthening, streamlining and operationalising the 2002 LDCs Accession Guidelines, pursuant to the 2011 MC8 Decision.
LDC Enhanced Integrated Framework
22. The ACP Group of States welcomes the launch of the Enhanced Integrated Framework (EIF) phase 2 on 1st July 2015, as well as the EIF Pledging Conference to be held during the Tenth WTO Ministerial Conference (MC10) in Nairobi. In this regard, we urge donors to come forward with substantial pledges in Nairobi.
Aid For Trade
23. We appreciate the effort of some donors to sustain their aid efforts. We urge donors to continue to support the efforts of our Members, to integrate into the world trading system, by directing aid for trade flows to areas of the highest priority as identified by the beneficiaries, including infrastructure, productive capacity, trade finance, connectivity, and costs of adjustment. This assistance should be in the form of new funding, without diverting from existing bilateral assistance in other areas, on a sustainable basis.
24. We are seriously concerned about the potential for erosion of the gains made as a result of graduation of some of our Members. Therefore, we call for the abandonment of per capita income statistics as the only measure to determine eligibility for Aid for Trade for WTO Members and recommend the use of different criteria.
Standing Agenda Item Decisions for the Tenth WTO Ministerial Conference (MC10) in Nairobi
25. We support the extension of the decision for MC1o to maintain the current practice of not imposing customs duties on electronic transmissions, and to continue the electronic commerce work programme with special attention to the situation in developing countries, particularly in least-developed country Members and least connected countries. In this regard, we also urge the recognition of the principles of non-discrimination, predictability, and transparency.
26. We also call on WTO Members to agree in Nairobi to make permanent the moratorium on the application of Subparagraphs 1(b) and 1(c) of Article XXIII of GATT 1994 on non-violation and situation complaints (NVCs) to the TRIPS Agreement.
The Tenth WTO Ministerial Conference (MC10) in Nairobi
27. We underline the importance of the Tenth WTO Ministerial Conference (MC10) to be held in Nairobi and look forward, therefore, to effectively and constructively participate in the deliberations of the conference. In addition, we call on all Members to ensure that any proposed Ministerial declaration for Nairobi is developed in a transparent, inclusive and consensus based process.
Post-Nairobi Work
28. We call upon Members to reaffirm in Nairobi, the Ministerial declarations and General Council Decisions relevant to the Doha mandates; and to take concrete steps to conclude the remaining issues in the DDA, with development as a key component.
29. We further call upon Members to ensure that post-Nairobi, all unresolved issues in the DDA on the development mandate are addressed and yield specific development milestones to conclude the DDA as soon as possible.
30. We urge the Tenth WTO Ministerial Conference (MC10) in Nairobi to give due consideration to the present Declaration.
Done in Brussels, 21 October 2015
[1] With a binding coverage of non-agricultural tariff lines of less than 35 percent.
[2] Comprised of the ACP, African and LDC Groups.