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tralac’s Daily News selection: 16 October 2015
The selection: Friday, 16 October
Today, at Africa Week 2015: UNGA debate on the Development of Africa and presentation of the reports of the Secretary-General on Progress in the Implementation of NEPAD and the Causes of Conflict and Promotion of Durable Peace and Sustainable Development in Africa.
Today: the joint annual consultative meeting between the AU Peace and Security Council and the European Union Political and Security Committee.
Next week: The Feeding Africa Conference
Poverty is falling faster among Africa’s female-headed households (World Bank Blogs)
A sizeable number of households in Africa today have female heads. Based on the latest Demographic and Health Surveys (DHS), 26% of all households Africa-wide are headed by women. Although there are cross-country differences, the shares both of the population living in female headed households (FHHs) and of households headed by women, have been rising over time. The data show quite clearly that the probability that a woman aged 15 or older heads a household, controlling for her age, has been increasing since the early 1990s in all regions and across the entire age distribution.
‘Rural women are the backbone of sustainable livelihoods,’ Ban declares on International Day
Lee Mwiti: 'Africa is complicated - here are the wealth numbers that prove it, including some major surprises' (M&G Africa)
World Bank’s new end-poverty tool: surveys in poorest countries (World Bank)
Addressing huge gaps in the collection of poverty data, the World Bank Group pledged today to work with developing countries and international partners to ensure that the 78 poorest nations have household-level surveys every three years, with the first round to be completed by 2020. Poverty-fighting efforts have long been constrained by a lack of data in many countries. The World Bank has identified 29 countries that had no poverty data from 2002 to 2011. Another 28 had just one survey that collected poverty data during that time. These gaps prevented analysts from identifying trends in how countries were making progress toward their goals, and posed a barrier to improving the lives of poor people.
Look beyond stats agencies: using mobile phones for data collection in Africa (UNECA)
“Ours is to have the citizen to supply structured data in the course of her normal economic activity,” said Mr. Dozie Ezigbalike, the Chief of Data Technology at ECA’s African Centre for Statistics during the opening of the Mobile data Conference in Addis Ababa. “One of the problems of collecting data is the low technology base and reliance on paper based methods,” said Mr Ezigbalike explaining the reasons ECA started a project on data collection through mobile devices.
Featured tweet, @DavidPrimack: Frank & very insightful discussions underway in Barbados on future of WTO & MC10 @commonwealthsec @CRNM_OTN hosting
MC10: Kenya pushes for cut in farming subsidies (Daily Nation)
Kenya has renewed calls for a cut of domestic subsidies in agriculture in the developed countries, to help her exports access the lucrative overseas markets. Foreign Affairs and International Trade PS Karanja Kibicho said the push for a cut in subsidies of crops such as maize will be key at the 10th WTO ministerial conference to be held in Kenya in December. “This conference is dedicated to Africa and therefore, should ensure that the outcomes are of benefit to the continent through fair multilateral trading system,” said Dr Kibicho at the National Trade Negotiations Committee retreat, held in Machakos, Thursday. The committee noted that policies in agriculture, industrial goods and fisheries need a deeper look so that it could widely benefit local countries. The Machakos meeting also explored the current mood in the WTO negotiations and what Kenya could gain from the Doha round of trade talks.
Kofi Annan, Sam Dryden: 'Food and the transformation of Africa - getting smallholders connected' (Foreign Affairs)
River Nile Transport Corridor development on course (COMESA)
The second steering committee meeting of the River Nile Transport Corridor Project took place in Cairo, Egypt from 01 to 02 October 2015. The purpose of the meeting was to consider the pre-feasibility study report prepared by Egypt and draft terms of reference pertaining to the development of the legal, institutional and regulatory framework for the project. The River Nile Transport Corridor Project aims at establishing a navigational route between Lake Victoria and the Mediterranean Sea through River Nile. So far a pre-feasibility study has been done, which identifies the sub-projects and activities for each footprint country. The footprint countries represented in the meeting were Democratic Republic of Congo, Egypt, Kenya, Rwanda, South Sudan and Sudan. NEPAD and South Africa were also represented at the meeting.
Northern Corridor: roadside stations programme (Northern Corridor Transit Transport Coordination Authority)
During its 27th sitting, held in Kinshasa, DR Congo, the Northern Corridor Council of Ministers endorsed the Roadside Stations roll out program. In line with this program, the Government of Kenya has recently established a Task Force for coordinating the implementation of the Roadside Stations Project. According to the road map, the RSS Taskforce in Kenya will come up with guidelines for the RSS and the business concession model by end of October 2015. This will enable the Government to engage the Private sector to start expressing their interest to invest. Similar structure will be adopted in other Northern Corridor Member States in the process of rolling out the Roadside Stations project. As spelt out in the Terms of Reference, the mandate of the RSS Taskforce is to;
Total says Kenya security important in Uganda pipeline decision (The East African)
Total's chief executive Patrick Pouyanne said on Thursday that his firm was considering exporting oil from Uganda via a pipeline through Tanzania because of security concerns about a route through Kenya. The French firm has previously said it was considering a Tanzanian route, but had not clearly spelled out the reason. Experts had said security was likely to be a major factor.
New, from tralac: Investment protection agreements: the implications of South African policy and legislative changes [The author: Gerhard Erasmus], Safeguard measures in multilateral and regional trade agreements [The author: Elenor Lissel]
Choppies plans expansion (IOL)
Choppies Enterprises, the Botswanan supermarket chain that listed in South Africa in May, plans to open about 30 stores in the year through June and may also expand via acquisitions as the retailer seeks to increase market share in the region. “We will open stores through organic growth in Botswana, South Africa, Zimbabwe and Zambia,” CEO Ram Ottapathu said by phone on Thursday. The Gaborone, Botswana-based retailer is also seeking to purchase companies and may enter Tanzania and Kenya, he said.
Nigeria-Turkey trade volume reaches $2.5bn, as Ankara increases gas imports (IBT)
Trade volume between Turkey and Nigeria has reached $2.5 billion, and there are efforts to increase investment, Turkish Ambassador to Nigeria Hakan Cakil said Thursday. Speaking at a business forum in Nigeria’s capital organized by the Abuja Chamber of Commerce and Industry, the Turkish envoy said his country aims to support business opportunities for both countries.
Ghana: Govt advocates trade portal for Africa (GhanaWeb)
Dr Ekow Spio-Garbrah, the Minister of Trade and Industry, has advocated the establishment of a trade portal for the African continent. He said the portal would help in trade facilitation and improvement in bilateral trade relations. Dr Spio-Garbrah was speaking at the Swiss-Ghanaian Chamber of Commerce Chairman’s Breakfast meeting on the theme: “Innovations in trade facilitation and e-government” in Accra.
Tanzania: Shilling woes lower Q2 industrial output (Daily News)
Shilling depreciation and unstable power supply are to blame for slowing down of manufacturing sector growth in this year’s second quarter. The sector contribution to GDP decelerated to 6.9% in the Q2 of this year compared to 10.1% of similar period last year. The shilling depreciated by over 20% in the first half of the year, following high demand amid low supply US dollar. The Confederation of Tanzania Industries Director for Policy and Research, Mr Hussein Kamote, said the shilling remained a key factor for the sector slow growth.
SA, DRC to meet on bilateral trade and investment relations (SABC)
DRC's Foreign Affairs Minister Raymond Tshibanda has maintained that his government has not abandoned plans to complete the final phase of the INGA hydropower project. “I think what's critical is not to move fast, but to ensure that every step you take is on a solid ground. We had to mobilise financing and we are talking to governments of China and South Africa and from now on things are going to take another pace.”
Delaware: Trade with South Africa focus of Tuesday roundtable (Delaware Online)
Kenya: Rotich calms fears of biting cash crisis (Business Daily)
Treasury secretary Henry Rotich on Thursday told Parliament that he expects the current cash crisis in government to be over in the coming months as special measures, including the hiring of consultants to boost tax collection, come into force. Mr Rotich said the government was also evaluating its expenditure in the current financial year to weed out non-critical spending to ease pressure on the Exchequer. [EU project to monitor counties' spending (Daily Nation)]
India's development cooperation with Africa: the role of the private sector (India Education Diary)
The road map ahead requires key policy considerations for India’s effective development cooperation with Africa. Towards this the Indian Government may consider institutionalizing this cooperation wherein the private sector can provide its views and suggestions about the geographical and sectoral focus of development cooperation. The coming India-Africa Forum Summit 2015 to be held from 26th of October till the 29th of Oct’15, provides a huge opportunity for Government on both the sides and their respective private sector players to define instruments of future engagements.
Transition from the informal to the formal economy in Africa - the way forward (ILO)
The fact that informality is gaining ground and remains a crucial development challenge does not mean absence of innovative policy frameworks to facilitate the transition from the informal to the formal economy and boost productive employment. African countries are searching for new policies and practical responses in order to promote decent work for a significant proportion of the working population who are engaged in the informal economy; and in many countries like in Algeria, Tunisia, Namibia, South Africa, Madagascar, Senegal or Cameroon, the ILO is assisting them in designing and implementing effective measures to tackle the issue of the informal economy and promote decent work conditions. [Background note prepared for the 13th African Regional Meeting]
Nepad's Ibrahim Mayaki: 'Small businesses important for Africa's growth' (Global Post)
Spillovers from China onto Sub-Saharan Africa: insights from the Flexible System of Global Models (IMF)
What is the impact of economic spillovers from China on sub-Saharan Africa. This is an increasingly important question because of China’s growing economic role as a partner of SSA countries for both trade and the build-up of infrastructure in the region. Three alternative scenarios are considered: first, lower potential output in China that is originally misperceived as a temporary cyclical slowdown; second, structural reforms in China that aim to increase potential output; and third, a relocation of low-end manufacturing to sub-Saharan Africa. [The impact of China’s slowdown on the Asia Pacific region: an application of the GVAR model (World Bank)]
Which donors, which funds? The choice of multilateral funds by bilateral donors at the World Bank (World Bank)
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This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to over 300 recipients across Africa and internationally, serving in the AU, RECS, national government trade departments and research and development agencies. Your feedback is most welcome. Any suggestions that our recipients might have of items for inclusion are most welcome. Richard Humphries (Email: This email address is being protected from spambots. You need JavaScript enabled to view it.; Twitter: @richardhumphri1)
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With around 40% of resource extraction and use linked to world trade, new policies required to address environmental impacts
International Resource Panel (IRP) report finds trade shifting burden of environmental impacts to developing economies
As countries become increasingly dependent on world trade, with 40 per cent of resources extracted and used worldwide linked directly or indirectly to trade, new policies are needed to address adverse environmental impacts, according to a new report.
International Trade in Resources: A biophysical assessment, produced by the United Nations Environment Programme-hosted International Resource Panel (IRP), reveals that the value of international trade has increased over six-fold and its volume more than doubled between 1980 and 2010.
This increase in trade has been accompanied by a shift in resource-intense processes, and associated environmental burdens, to developing nations.
UNEP Executive Director Achim Steiner said, “The benefits of international trade can include better access to resources and even more efficient production techniques from economies of scale. Yet the associated increase in global consumption and production results in overall environmental impact, from pollution to resource depletion.
“That these impacts are being transferred to poorer nations is further cause for concern. In taking advantage of the benefits of international trade, we will need policies that protect the environment from trade’s detrimental effects.”
The report examines the upstream resource requirements of trade, which refers to the materials, energy, land and water used in the country of origin for producing traded goods, but left behind as wastes and emissions.
While trade has risen for most materials, dependency on world markets is highest for fossil fuels and metals. Around half of the volume of extracted fossil fuels and metals is reallocated through trade.
Estimating upstream requirements of traded commodities is challenging, with estimates ranging from 40 to up to 400 per cent of traded materials. With this in mind, the report draws the following conclusions:
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The amount of global resource extraction and use – 65 billion tonnes in 2010 – has increased at a slower rate than trade, which signifies the rising overall dependency of countries on trade.
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Of the resources extracted and used worldwide, 15 per cent are directly traded. This proportion rises to around 40 per cent when including resources indirectly associated with trade-that is, used in the production process, but not physically included in the traded good.
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High-income countries have up to twice as large positive trade balances when measured in raw materials rather than direct trade, while for low-income countries the opposite is true. This signifies a shift in resource-intensive processes from high-income countries to developing and emerging economies, with a corresponding shift in associated environmental burdens.
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The distribution of trade dependency has changed. Although high-income countries continue to be main recipients of resources via trade, emerging economies such as China have switched to becoming major importers. The world trading system has come to rely on ever fewer net exporters, which makes it increasingly vulnerable to disruptions in supplies.
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Trade could be resource efficient in that it allows commodities to be obtained from countries/locations where their production requires fewer resources and generates fewer environmental impacts than in others. However, numerous processes – including higher trade levels, declining ore grades and decreasing energy returns upon energy investment (EROEI), higher food demand and diminishing land productivity – further increase the upstream resource requirements of trade. These factors are likely to negate any benefits of a potentially more resource efficient allocation of extraction and production activities via world trade.
Appropriate trade and environmental policies and agreements are therefore required in order to limit over-exploitation of resources, waste and environmental destruction linked to expanded levels of trade.
Dr. Ashok Khosla and Dr. Janez Potocnik, co-chairs of the IRP, said in a statement, “This extraordinarily readable report manages to present the essential insights decision-makers need to design and implement policies that will ensure international trade is a positive instrument for building more prosperous economies, a fairer world and a healthier global environment.”
About the International Resource Panel
The International Resource Panel was established in 2007 to provide independent, coherent and authoritative scientific assessment on the sustainable use of natural resources and the environmental impacts of resource use over the full life cycle. By providing up-to-date information and best science available, the International Resource Panel contributes to a better understanding of how to decouple human development and economic growth from environmental degradation. The information contained in the International Resource Panel's reports is intended to be policy relevant and support policy framing, policy and programme planning, and enable evaluation and monitoring of policy effectiveness.
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‘Rural women are the backbone of sustainable livelihoods,’ Ban declares on International Day
Marking the International Day of Rural Women, the United Nations today affirmed the role of women as significant and crucial for the progress of rural households, local and national economies.
“They are farmers and farm workers, horticulturists and market sellers, business women and community leaders. Rural women are the backbone of sustainable livelihoods and provide food security for their families and communities,” said UN Secretary-General Ban Ki-moon in his message marking the occasion.
Mr. Ban also noted that the International Day falls just after the adoption of the 2030 Agenda for Sustainable Development last month. He urged the global leaders to seize the opportunity offered by the new framework to transform rural women’s lives.
“The new Sustainable Development Goals (SDGs) have gender equality and women’s empowerment at their core, and include a target to “double the agricultural productivity and incomes of small-scale food producers, in particular women.” Indeed, rural women are critical to the success of almost all the 17 SDGs,” said Mr. Ban.
“We must build resilient social protection systems, labour and product markets, governance institutions, and civil society organizations so that rural women can both contribute to and benefit from sustainable development,” said the Secretary-General.
The sentiment was shared by UN Women Executive Director Phumzile Mlambo-Ngcuka who also reaffirmed that rural women play a key role in underpinning sustainable development and further stressed that following the framework of Agenda 2030 will help in accelerating progress for rural women.
“As we launch Agenda 2030 globally and locally, we must learn from the lessons of implementing the Beijing Platform for Action and the Millennium Development Goals (MDGs). We have an unparalleled opportunity and commitment to end poverty and hunger, achieve food and nutrition security, and guarantee sustainable livelihoods by investing in rural women and climate-resilient agriculture,” said Ms. Mlambo-Ngcuka.
However, according to MDG indicators, rural women suffer disproportionately from poverty, and face multiple forms of discrimination, violence and insecurity as compared to rural men and urban men and women.
Ms. Mlambo-Ngcuka observed that at the Global Leaders’ Meeting on Gender Equality and Women’s Empowerment: A Commitment to Action, the top political leaders of Angola, Colombia, Jordan, Paraguay, Senegal and Viet Nam highlighted intersecting forms of discrimination for girls and women living in poverty in rural areas.
“They include economic and financial barriers to girls’ education such as the elimination of school fees and provision of stipends, scholarships and non-financial support, particularly in rural and remote areas. Legal reforms are needed to guarantee women’s equal right to property and to realize sexual and reproductive health and rights,” added the Executive-Director.
She urged to address these barriers to rural women’s progress with measures that are compliant with the Agenda 2030.
She also stressed on increasing access to healthcare, provision of free or subsidized essential drugs and commodities, access to family planning measures and upgrading their skills through agricultural extension services.
Highlighting the role women can play in addressing climate change activities, the Executive-Director reported that in Bangladesh, targeted steps are being taken with 19,000 women, to prepare for its known vulnerability to climate change.
“Women’s participation in local institutions for governing natural resources is critical for sustainable land, forest and water management, as well as for building resilience and planning for climate change and adaptation strategies,” said Ms. Mlambo-Ngcuka.
“Addressing the adverse effects of climate change through climate-resilient agriculture strategies and natural resource management is increasingly important for securing rural women’s rights, empowerment, and well-being,” she added.
Although women constitute 43 percent of the agricultural labour force in developing countries, many of them are without ownership of the lands they work in and neither do they have an authoritative voice in local governments.
Ms. Mlambo-Ngcuka stressed that this can only be changed if the global leaders take every opportunity to ‘ensure that rural women do not lag behind, but rather lead the way.’
“The International Day of Rural Women is an opportune moment to amplify rural women’s voices and experiences from around the globe. Let us act on our commitment to creating opportunities for rural women across every relevant goal – and thereby advance progress for all,” added Mr. Ban.
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ILO 13th African Regional Meeting: Towards inclusive and sustainable development in Africa through decent work
The 13th African Regional Meeting will be held in Addis Ababa, Ethiopia, from Monday 30 November to Thursday 3 December 2015.
The Meeting will bring together ILO’s tripartite constituents – governments, employers and workers – along with the political, economic and social actors of the world of work in Africa, to address the imperative of promoting an inclusive and job-rich growth through decent work in Africa.
This theme will be taken up in the Report that the ILO Director-General will present to the Meeting, entitled “Towards Sustainable and Inclusive Growth in Africa through Decent Work”.
The proposed agenda is to undertake a final review of progress made on the implementation of the “Decent Work Agenda in Africa, 2007-15” and to discuss and agree on strategic vision for the ILO in the Africa region.
Towards Sustainable and Inclusive Growth in Africa through Decent Work: Report of the Director-General
The 13th African Regional Meeting convenes at a critical moment. A new era has opened up, making the achievement of sustainable growth with decent work a realistic prospect. Africa can indeed reap the benefits of a demographic dividend and draw on the energy of its young women and men, who are better trained and have easier access to new technology and knowledge networks than ever before. The continent taken as a whole enjoys high economic growth and relatively stable macroeconomic conditions. There is evidence of strong entrepreneurial spirit along with recognition of the transformative role of social protection. Africa also possesses natural resources that are in chronic shortage globally. Though much potential is going untapped, precluding more inclusive and sustainable growth, a better future is possible provided that policies move in the right direction.
There is growing awareness of the benefits of such a policy shift. Employment and decent work loom large in Africa’s vision of the future. A number of key events have underscored the central role of decent work for achieving a new development paradigm for Africa. Such events include the African Union (AU) Extraordinary Summit on Employment and Poverty Alleviation in Africa (Ouagadougou, September 2004); the Conference of African Ministers of Finance, Planning and Economic Development (Abuja, May 2005); the Conference of African Ministers (Ouagadougou, May 2006); and the 11th and 12th ILO African Regional Meetings held in Addis Ababa (April 2007) and Johannesburg (October 2011), respectively. More recently, the AU adopted a declaration making decent work a central goal of economic and social policies (January 2015) and it launched Agenda 2063, which provides a vision for seizing new development and investment opportunities.
In addition, the 2030 Agenda for Sustainable Development represents a major landmark for the ILO’s tripartite constituents to make the Decent Work Agenda a national, subregional and regional objective. Already, decent work is central to the post-2015 framework. The outcome of the Financing for Development Conference of July 2015 and the United Nations (UN) Climate Change Conference will also give direction to these efforts.
Importantly, Africa has gained greater policy space. The majority of African countries have weathered the global crisis, the prolonged recession in many advanced economies and the more recent slowdown in Asia and Latin America – key markets for African products – much better than would have been predicted on the basis of earlier experience. There is renewed interest in deepening economic integration among African countries, with a view to mobilizing internal engines of economic growth and job creation and making the continent less dependent on external factors.
The focus of the 13th African Regional Meeting should be to draw lessons from the past and plot the way forward, notably as regards how to overcome key obstacles to the implementation of the Decent Work Agenda so as to pave the way for a better economic and social future. The result should be clear directions for ILO presence in Africa. The ILO’s Programme and Budget for 2016-17 has defined priority outcomes for the Organization. A number of the substantive areas have been identified by constituents as being particularly urgent for Africa, including those on the formalization of the informal economy, promoting sustainable enterprises, creating and extending social protection floors, and decent work in the rural economy. The Regional Meeting has the opportunity to take into account the particular circumstances in Africa, including the fragility and conflict in a number of countries, and to tailor responses to the region.
Background note for the panel on “Transition from the informal to the formal economy in Africa: The way forward”
In Africa, the vast majority of the labour force and micro- and small enterprises (MSEs) is operating in the informal economy. According to the most recent estimates, 66 per cent of the workers in non-agriculture employment in sub-Saharan Africa are in a situation of informal employment while this percentage is about 50 per cent in North Africa, with great disparities between countries. If subsistence agriculture is considered, the percentage of informal employment is even larger considering that more than half of total employment of the region is in agriculture.
Recent years were marked by a growing awareness among policy-makers, workers’ and employers’ organizations worldwide, including in Africa, about the need to move out of informality to promote inclusive growth and to achieve decent work for all. The adoption of a new international instrument, the Transition from the Informal to the Formal Economy Recommendation (Recommendation No. 204), by the International Labour Conference in June 2015, achieved through strong tripartite consensus, provides the framework and the guidance for transition from the informal to the formal economy. The 13th African Regional Meeting is the first opportunity after the adoption of Recommendation No. 204, to discuss the informal economy and its characteristics in Africa and to reflect on the practical ways forward to promote the implementation of Recommendation No. 204 concerning transition from the informal to the formal economy.
Background note for the panel on “Employment and new technologies: Opportunities for Africa’s youth”
Africa has made considerable progress in economic growth. However, in many cases, the pattern of growth has not been able to generate enough decent jobs to absorb the growing labour force. Almost half of new labour market entrants since 2005 took jobs in the informal economy and one third in agriculture – jobs often characterized by low productivity, wages and technological uptake. The challenge for African countries is therefore to transform their economies in an effort to generate more and better jobs and inclusive growth.
Technological change can be instrumental in this regard. Technological change may be defined broadly “as the process by which economies change over time in respect of the products they produce and the processes used to produce them”. The pattern of technological change not only shapes the quantity of jobs but also the type of jobs. And while new technologies may destroy jobs through automation and outsourcing to foreign countries, they also generate new types of jobs by developing new activities and insourcing, and can fundamentally transform task profiles of existing jobs.
A fundamental challenge for African countries aiming at generating more and better jobs is to steer technological development in a manner so as to promote patterns and paths of innovation that generate productive jobs that meet people’s needs and aspirations, and to ensure that those presently in the informal economy and low productivity sectors are not left behind.
Discussion paper for the High-Level Dialogue “Decent work in Africa in the post-2015 context: Rights and social dialogue for inclusive and sustainable growth”
The Report of the Director-General to the Regional Meeting, Towards inclusive and sustainable development in Africa through decent work, describes the recent strengthening of the region’s economic performance while pointing out that social progress has been uneven. Reductions in extreme poverty have been accompanied by widening income inequality in many countries. Africa’s population is growing at a rapid pace creating a huge need for decent work opportunities for young women and men. The potential of the generations coming of work age between now and 2030 is enormous but a failure to meet their expectations could lead to an aggravation of social ills such as crime, civil conflict and mass migration.
The Goals agreed in the 2030 Agenda are ambitious, but were they not to be realized by 2030, the consequences for the world, and Africa in particular, could look very grim.
It will be important for labour, employment and social affairs ministries, as well as social partners to be well-prepared both for strategic discussions on the role of decent work in inclusive growth and sustainable development as well as on specific priorities such as social protection or youth employment.
Delegations to the Regional Meeting will wish to highlight the challenges faced by their country as an initial step in identifying policy priorities and monitoring progress. Such priorities could range from specific policy areas such as skill development or support to micro-, small and medium-sized enterprises, or capacity building of key institutions such as labour, employment and social affairs ministries, statistical institutes and, of course, the social partners.
Multinational enterprises, development and decent work – Africa
Report prepared for the Special Session on the Promotion and Application of the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy in Africa
This report presents an overview of trends in foreign direct investment (FDI) in Africa and their opportunities for decent work; and of initiatives undertaken by governments and employers’ and workers’ organizations in the ILO member States in the region to raise awareness and promote the application of the recommendations set forth in the Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy.
FDI inflows into Africa continue to increase and intra-African FDI is on the rise. Natural resources continue to attract most of the investment, but the services and manufacturing sectors are drawing more investors from abroad. The amounts invested in projects are increasing and greater flows are going to capital investments, indicating some movement up the value chain in local production. The number of jobs created is also increasing as the investments expand in infrastructure and consumer-facing sectors. However, there is much room for further diversification of FDI projects and for policies to foster more linkages with local SMEs.
Although each country’s experience with FDI and operations of MNEs is unique, respondents’ views often converged on which areas of the MNE Declaration are relevant in their national context. All three groups considered the provisions regarding employment promotion to be relevant. The area of training was indicated as relevant by employers and governments. Workers and employers coincided in their appreciation of the principles on wages, benefits and conditions of work.
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Poverty is falling faster among Africa’s female headed households
A sizeable number of households in Africa today have female heads. Based on the latest Demographic and Health Surveys (DHS), 26% of all households Africa-wide are headed by women. Although there are cross-country differences, the shares both of the population living in female headed households (FHHs) and of households headed by women, have been rising over time. The data show quite clearly that the probability that a woman aged 15 or older heads a household, controlling for her age, has been increasing since the early 1990s in all regions and across the entire age distribution.
What explains this? Using the full series of DHSs fielded in Africa over the last 25 years, and covering 89 percent of Africa’s population, my recent research with Annamaria Milazzo has investigated Africa-wide changes in prevalence. The results suggest that economic growth brings lower female headship, presumably due in part to lower work-related migration by men, associated with a growing local economy. The seeming paradox that female headship is rising during a period of growth is resolved by the fact that other things are changing across Africa. Changes in demographic and population characteristics, social norms, education and the nature of the family appear to be encouraging female headship.
An extra year of schooling produces a 3 percentage point increase in the share of the population living in FHHs. On average, a one year rise in women’s age at first marriage produces a 2.5% point increase in the share of the population living in FHHs – an effect almost as strong as that of an extra year of schooling. Life expectancy’s positive effect – equal to a 0.5% point boost per extra year – presumably reflects the natural survival advantage of women that is revealed with higher overall life expectancy, and the resulting incidence of widow headed households. Conflict and HIV also raise a country’s share of population in FHHs.
Thus FHH prevalence has been rising while poverty has been falling. Past literature has been generally suggestive that FHHs tend to be poorer. But does this imply that FHHs have been left behind by recent improvements in living standards? Female heads are a diverse group. Some – such as married women with a nonresident husband (polygynous or migrant), or educated women who may choose, and socially and economically afford, not to be married or remarried – can be expected to be relatively well-off. Others – war or AIDS widows, separated or abandoned women, and single mothers who have not ‘chosen’ headship but simply have no options – are frequently found to head disadvantaged households.
So what has happened to the living standards of FHHs in the aggregate? This is examined by calculating country-specific changes in the headcount index of poverty based on real household per capita consumption expenditures in 2005 PPP, for male and female headed households separately. Spells of comparable survey pairs for the same country allow this to be done for 27 spells and 24 countries that account for approximately 80% of Africa’s current population.
Poverty declined for both household groups but in most countries, it fell faster for FHHs. This is also true when one allows for the diversity among FHHs – for example, comparing households with widow and non-widowed heads, married heads with and without a male adult household member and the same for non-married heads. And the finding that poverty is falling faster for FHHs is robust to testing sensitivity to allowing for the generally smaller size of FHHs and economies of scale in consumption, does not alter this key finding. The living standards of the various types of FHHs followed dissimilar paths across countries and time periods with no one type consistently outperforming the others, yet with at least one type usually outperforming MHHs. There is little discernible pattern across countries. One category of FHH does well in one country or time period while another category does best elsewhere.
In sum, poverty has fallen more rapidly in FHHs. A decomposition of the change in poverty indicates that, rather than putting a break on poverty reduction, FHHs are contributing appreciably to the overall decline in poverty despite their smaller overall share in the population.
But why has poverty fallen faster for FHHs? Perhaps poor FHHs face relatively high economic returns to the new opportunities unleashed by growth; or perhaps they have benefited disproportionately from the expansion of social protection in the region; or perhaps the group of people living in FHHs is fundamentally changing over time. A superficial examination does not support any of these explanations but this new stylized fact about poverty in Africa warrants a closer look.
Learn more about the research in the World Bank Policy Research Working Paper, “Women Left Behind? Poverty and Headship in Africa”, below.
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New Partnership for Africa’s Development: progress in implementation and international support
New Partnership for Africa’s Development: thirteenth consolidated progress report on implementation and international support
The present report, submitted in response to General Assembly resolution 69/290, coincides with several global milestones relevant to the agenda of the New Partnership for Africa’s Development (NEPAD), including the Third International Conference on Financing for Development, the 20-year review of implementation of the Beijing Declaration and Platform for Action, the prospective adoption of the post-2015 development agenda and the 2015 United Nations climate change prospective agreement, as well as the seventieth anniversary of the founding of the United Nations. Beyond those global milestones, 2015 is also a landmark year for Africa’s development, with the adoption of the African Union Agenda 2063, the long-term, strategic vision for the continent’s transformative development over the next 50 years, and its first 10-year Implementation Plan (2014-2023).
The report highlights actions taken by African countries towards achievement of the aims of NEPAD, including increased investment and regional coordination in infrastructure development and regional integration, innovative projects related to agriculture development and climate change adaptation, and strengthened efforts to improve national and regional health-care systems in the wake of the Ebola outbreak. To achieve further progress, however, the continent will need to overcome challenges in all of the NEPAD priority thematic areas and adapt the NEPAD priorities to the new strategic thinking of the African Union.
Despite extensive efforts in domestic resource mobilization, the report identifies inadequate financing as a major challenge in all sectors and underlines the need for greater investment by African countries and their development partners, as well as for greater efforts to spur private sector investment and public-private partnerships in the region. The report emphasizes the need for African countries to achieve economic transformation through industrialization and diversification. It also stresses the need for the international community to complement the continent’s efforts, including through increased financial support, technical assistance and capacity-building, and emphasizes the need for Africa’s priorities to be reflected in the post-2015 development agenda.
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tralac’s Daily News selection: 15 October 2015
The selection: Thursday, 15 October
Rwanda: Local traders want Northern Corridor summit to focus on cross-border barriers (New Times)
The local business community wants the forthcoming Northern Corridor Heads of State Summit in Nairobi, Kenya to focus on addressing the challenge of cross border trade barriers. The consensus was reached during a meeting of the business community to discuss barriers hindering cross-border trade ahead of the summit, yesterday. According to the traders, the barriers include, a high cost of air transport, double taxation, and laxity in the implementation of treaties agreed under the EAC common market protocol and single customs territory. They expect the 11th northern corridor summit on October 17, to largely focus on these challenges to boost regional trade.
EALA: President Kenyatta addresses special sitting
President Uhuru Kenyatta addressed the EALA, calling on the Assembly to consolidate its work for the furtherance of the integration process. President Kenyatta further said the citizens of the region were yearning to freely move, work and enjoy the tangible benefits of integration. The President further urged stakeholders in the integration dispensation to go the extra mile and create awareness to the citizens of the region. He remarked that citizens of the region needed to be fully aware of the integration process. He said this was a role to be undertaken by both politicians and the ordinary people as well.
The Speaker called on the Summit of EAC Heads of State to intervene to ensuring the Institutional Review of the EAC is finalized. He lamented that the Institutional Review process was an expensive affair to taxpayers and time consuming. “This is none other than the Institutional Review which has been on the cards for the last six years and has cost tax payers – an estimated yet astronomical figure of USD 2 Million! The process has been through a full round in circles much to the detriment of the EAC. On the one side the Secretariat and other Organs remain under-capacitated and under-funded. On the other side, the EAC is unable to realise its full potential”, Rt. Hon Speaker said.
Profiled, recent EALA reports: Workshop on investment policies and strategies in the EAC region, Regional parliamentarian's policy workshop on climate change and gender
Africa Mining Vision Compact launched (AU)
The African Union Commission launched the Africa Mining Vision Compact during a high level dialogue session with the Private Sector Leaders, in the margins of the 1st ECOWAS Mining and Petroleum Forum and Exhibition on 8 October 2015. The main objective of the AMV Compact that will be developed and concluded in due course between the private sector investing in the mining sector and AU Member States, is to ensure that the private sector operates in a manner that is in line with the Africa Mining Vision that was endorsed by the AU Heads of State and Governments in 2009. The AMV compact will create a business environment that will be mutually transparent and accountable in order to ensure optimal benefits from the sector accruing to both the governments and the private sector.
Zimbabwe: ‘Diamond miners duped Govt’ (The Herald)
Diamond mining companies in Marange are resisting the push by Government to consolidate their operations to improve transparency because they misrepresented their investment plans to the State. Mines and Mining Development Minister Walter Chidhakwa said the mining companies did not invest the amount of capital they agreed on with Government when the parties signed the joint ventures. Lack of investment in exploration to extend life of mines through discovering new deposits to sustain operations has seen surface gems mining out. This has caused revenue from their mining activities, in which Government has 50% interest, to plunge drastically.
As countries become increasingly dependent on world trade, with 40% of resources extracted and used worldwide linked directly or indirectly to trade, new policies are needed to address adverse environmental impacts, according to a new report. International Trade in Resources: A biophysical assessment, produced by the United Nations Environment Programme-hosted International Resource Panel, reveals that the value of international trade has increased over six-fold and its volume more than doubled between 1980 and 2010. This increase in trade has been accompanied by a shift in resource-intense processes, and associated environmental burdens, to developing nations.
New report spotlights links between maritime transport and sustainability (UNCTAD)
The 2015 Review of Maritime Transport, published by the United Nations Conference on Trade and Development, underscored the role of maritime transport in helping implement a workable international sustainable development agenda. The report also revealed that developing countries, especially in Africa and Oceania, pay 40 to 70% more on average for the international transport of their imports than developed countries. This is mainly due to regional trade imbalances, pending port and trade facilitation reforms, as well as lower trade volumes and shipping connectivity. Further, the report also states that the developing economies' share of world container port throughput increased marginally to approximately 71.9%. This continues the trend of a gradual rise in developing countries' share of world container throughput.
Infographic, @ShippingLatest: What are the main African countries for container handling?
China’s transport initiative could boost trade up to $2.5 trillion (JOC)
China’s land and maritime transport initiative linking Asia with Europe and Africa, and the countries in between, promises to add up to $2.5 trillion in trade to the country over the next decade, a Kuehne + Nagle executive said Thursday. “That’s more than the value of (Chinese) exports in 2013,” Jens Drewes, president, North Asia, told roughly 600 people at JOC’S TPM Asia Conference in Shenzhen.
Concern as 6000 trucks are stranded at Dar port (The Citizen)
At least 6,000 trucks have been stranded at the Dar es Salaam Port following cumbersome procedures of clearing cargo, transport stakeholders lament. According to them, the situation has been caused by the introduction of VAT and single customs territory for transporting goods to DR Congo. The president of the Transporters Association of Tanzania, Mr Zacharia Hans Poppe, told reporters that the ports authority was concerned about the declining amount of cargo at the Dar es Salaam Port. “The introduction of VAT at the rate of 18% on transit cargo is set to kill transport business for transit goods from Dar es Salaam Port to Congo. Already at least 6,000 trucks are parked at the port without business. This will definitely render thousands of Tanzanians jobless,” he said.
Toward solutions for youth employment: a 2015 baseline report (ILO)
One third of the world’s 1.8 billion young people are currently neither in employment, education or training. Of the one billion more youth that will enter the job market in the next decade, only 40 percent are expected to be able to get jobs that currently exist. The global economy will need to create 600 million jobs over the next 10 years – five million jobs each month – simply to keep pace with projected youth employment rates. Reversing the youth employment crisis is a pressing global priority and the socio-economic cost of inaction is high, says a new report. This inaugural report, Toward Solutions for Youth Employment: A 2015 Baseline Report, has been released by Solutions for Youth Employment (S4YE) – a multi-stakeholder global coalition established to improve youth access to work opportunities.
Kenya economic update (World Bank)
Kenya’s economic performance remains solid, with the growth rate expected to improve from 5.3% in 2014 to 5.4% in 2015, according to a new World Bank Group economic report released today. It is projected to rise further to 5.7% in 2016. The most recent Kenya Economic Update attributes the growth to government investment in infrastructure, including railways, roads and energy, and strong consumer demand. The foundation for growth remains strong, the report says, though prospects for higher growth have moderated from the impact of external shocks, including the recent crisis in China and weak global currencies. The current fiscal expansion presents a risk to growth, the KEU states. The current account deficit also remains high due to poor performance of the export sector, which has wiped out gains from lower oil prices.
Bank financing of SMEs in Kenya (Central Bank of Kenya)
FinAccess Business is a research project conducted jointly by FSD-Kenya, the World Bank, and the Central Bank of Kenya to improve understanding of the SME market on both the supply and demand sides. Demand-side data continues to be limited due to the lack of a representative list of active business establishments in Kenya, which makes it difficult to track the size of the market as well as the evolving characteristics of the business population and their need for financial services. This is a major gap in the analysis of the Kenyan SME finance market, which will be analysed in a forthcoming, indepth report. The present report provides instead a comprehensive view of the supply-side of SME finance and its evolution between 2009 and 2013.
Ethiopia's industrialisation spells crisis for Kenya's Turkana - HRW (Business Daily)
Industrial projects along Ethiopia's Omo River could dry up Kenya's Lake Turkana and create a humanitarian and environmental catastrophe exacerbated by climate change, Human Rights Watch said on Thursday. Turkana, the world's largest desert lake, lies in Kenya's northwest corner, on the border with Ethiopia, and gets 90% of its water from the Omo River. [Download the report]
Pick n Pay remains focused on growing footprint outside SA (Business Day)
South African retailer Pick n Pay on Tuesday said growing its business outside SA remained a strategic priority for the company "notwithstanding the challenging trading conditions facing some regions". In the 26 weeks to end-August, the retailer said it opened six stores outside its home market — three in Namibia, one in Zambia and two in Zimbabwe.
Egypt's net FDI rises 54.6% to $6.4bn in fiscal year 2014/15: CBE (Ahram)
According to the central bank's September bulletin, Egypt's FDI rose by $2.25bn since standing at $4.12bn a year earlier. The huge increase follows fiscal and legislative reforms introduced by Egypt since the start of 2014/15, and comes during the country's first period of sustained political stability since the 2011 revolution. Money from Arab countries made up most of the investment inflows, increasing 51.6% to $2.67bn from $1.3bn the year before. European Union investments rose 3.5% to $6.9bn from $6.6bn.
Mozambique: President considers level of poverty in the country 'unacceptable' (Club of Mozambique)
Mozambican President Filipe Nyusi, said Tuesday in Maputo that the level of poverty in Mozambique "unacceptably high", pointing inclusive economic growth as essential to the fight against social inequalities in the country. Nyusi highlighted the fight against poverty as the main challenge facing Mozambique, when he spoke at the Second Nordic-Mozambican Conference on Inclusive Growth in Mozambique, which started Wednesday in Maputo.
Namibia: Alternative markets for red meat explored (New Era)
Mecki Schneider, the chairperson of the Livestock Producers Organisation (LPO), says various alternative markets have in the meantime been explored. Contact was made with China, Hong Kong and Russia as possible alternative markets. In spite of interest in Namibian products, these markets are not used yet. The two main reasons are that the phyto-sanitary agreements have not yet been finalised and the decrease in total slaughters. Meat exports to the USA could become a reality in the near future as soon as their meat inspection certification is finalised by their Food Security and Inspection Services.
Agricultural supply chains and agro-industrial parks: position paper (Abgiz)
An increasing number of African governments are focusing on the creation of agro-industrial parks as a tool to overcoming subsistence farming and promoting a value chain creation. South Africa is the no. 1 exporting country in the Sub-Saharan region. Italy is the no. 3 worldwide producer of agricultural machines and the no. 1 for packaging, with a supply chain worth over 150 billion dollars. The two countries could integrate their competencies and create agro-industrial parks as operational tools to better and more rapidly take advantage of the emerging opportunities in African markets.
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Addressing the youth employment crisis needs urgent global action
In the coming decades, global growth will depend on today’s young people. Combatting the persistent youth employment crisis requires a global effort and proactive action.
One third of the world’s 1.8 billion young people are currently neither in employment, education or training. Of the one billion more youth that will enter the job market in the next decade, only 40 percent are expected to be able to get jobs that currently exist. The global economy will need to create 600 million jobs over the next 10 years – five million jobs each month – simply to keep pace with projected youth employment rates. Reversing the youth employment crisis is a pressing global priority and the socio-economic cost of inaction is high, says a new report.
This inaugural report, entitled Toward Solutions for Youth Employment: A 2015 Baseline Report, has been released by Solutions for Youth Employment (S4YE) – a multistakeholder global coalition established to improve youth access to work opportunities. This coalition is a partnership started by the World Bank Group, Plan International, the International Youth Foundation (IYF), Youth Business International (YBI), RAND, Accenture, and the International Labour Organization (ILO).
“Young people account for 40 percent of the world’s population – the largest youth generation in human history – but they are disproportionately affected by unemployment. This is a persistent problem. Approximately 30 percent of young people are not in employment, training or education, and around the world, young women are worse off. We need to act now, and we need to act together if we are going to realize the significant opportunities presented by this many young people today,” said Matt Hobson, S4YE Coalition Manager.
While circumstances differ in various regions, the report adds, the issues remain the same – the world’s youth are unable to find sustainable productive work. This contributes to inequality, spurs social tension, and poses a risk to present and future national and global prosperity and security.
This report provides a baseline of trends, identifies constraints, and provides potential solutions to the youth employment crisis based on knowledge of successful and promising programs. It also highlights specific population – young women, youth in conflict-affected and fragile states, as well as rural and urban youth – that requires dedicated attention.
“Global youth unemployment is a growing global challenge. When young workers are not able to connect to the labor market, it profoundly impacts their ability to participate fully in the economy, and threatens their social and economic future,” said John Irons, Managing Director at The Rockefeller Foundation and S4YE Board Member. “At The Rockefeller Foundation, we share S4YE’s view that working with employers is key to opening more job opportunities for youth, creating better matches for employers and young workers, and making sure that young people have the support they need to succeed. By expanding access to labor market opportunities for youth and helping companies derive value from hiring from diverse pools of youth talent, we see the potential to not only address youth unemployment at scale – but to build more inclusive economies.
“The report shows that young people are by inclination more entrepreneurial than adults - and we now know that of all the interventions governments, private sector and civil society implement to address youth employment, providing support to early entrepreneurs is the most effective,” said Hobson. “The good news is that experience and evidence increasingly indicate that we already have some of the policy and program responses in our arsenal to tackle youth employment now.”
A great deal of progress has been made in recent years toward understanding the complexities of youth employment and how to promote it. To improve the chances for young people around the world, the Coalition will prioritize focusing on four frontier areas to support opportunities for young people:
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Digital Age Impact – the technological revolution is fundamentally changing work and relationships, but this shift is unevenly felt across the world.
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Skills Gap – in order to fill the skills gap, opportunities for men, women, and those at the lowest end of the spectrum needs to improve.
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Entrepreneurship and Self-Employment – worldwide, youth are 1.6 times more likely than adults to display entrepreneurial activity, which needs to be bolstered.
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Quality Jobs – quantitative unemployment measurements do not reflect quality of employment and deeper understandings of today’s working conditions is required.
Today’s youth will not be able to escape poverty by 2030 if they do not have a means of employment, says the report. New targets related to youth employment in the United Nations Sustainable Development Goals (SDGs) reflect this recognition and desire for change. The report helps track the SDGs by providing a baseline against which to measure progress.
Success, sustainability, and scale in reaching full youth employment will not be possible without collaboration involving government and public institutions at all levels, says the report. The Solutions for Youth Employment coalition is committed to seeing 150 million more youth at work. It envisions a world where an empowered and employed young generation drives global prosperity. To this end, it aims to link by fostering global coordination, learn by collecting and using evidenced-based knowledge, and leverage by using resources to scale-up proven solutions.
Maritime transport and climate policy at a critical juncture, UNCTAD Report says
As the global community commits to the new Sustainable Development Goals and gears up for a new international climate policy agreement, the UNCTAD Review of Maritime Transport 2015 highlights the role of freight transport, including maritime transport, in addressing the global sustainability and resilience agenda.
With more than 80 per cent of world merchandise trade by volume being carried by sea, maritime transport remains the backbone of international trade and globalization, the report says. Equally, the sector is a key enabling factor for other sectors and economic activities.
The Review of Maritime Transport 2015 underlines that maritime transport is facing the dual challenge of climate change mitigation and adaptation. While curbing greenhouse gas emissions remains urgent to ensure manageable global warming levels, the effects of climate variability and change – irrespective of the causes – are already being felt in different parts of the world, often in the poorest countries which are less able to cope.
Seaports, acting as key nodes in international transport networks across supply chains, are particularly vulnerable to climate change due to their location in coastal and low-lying areas. They are likely to be affected directly and indirectly by climatic factors such as rising sea levels, extreme weather events and rising temperatures.
These factors will also affect port hinterland connections and transport corridors across transport networks as international trade increasingly requires the use of rail, road and waterway transport. In this context, building the climate resilience of maritime transport systems is a precondition for their long-term sustainability, the UNCTAD report says.
Scaling up finance levels and diversifying sources of finance is critical for the implementation of sustainable and resilient freight transport systems including in the maritime sector. In an era of increasingly constrained national budgets, therefore, finding innovative ways to mobilize financing is critical. New sources and mechanisms and greater private sector involvement such as through public-private partnerships are important. Climate finance could emerge as an important channel for mobilizing additional resources, including for maritime transport.
Recent changes in the legal and regulatory framework
In 2014, important regulatory developments in the field of transport and trade facilitation included the adoption of the International Code for Ships Operating in Polar Waters (Polar Code), expected to enter into force on 1 January 2017, as well as a range of regulatory developments relating to maritime and supply chain security and environmental issues.
To further strengthen the legal framework relating to ship-source air pollution and the reduction of GHG emissions from international shipping, several regulatory measures were adopted at the International Maritime Organization (IMO), and the Third IMO Greenhouse Gas Study 2014 was finalized. Also, guidelines for the development of the Inventory of Hazardous Materials required under the 2010 International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea – not yet in force, however – were adopted, and further progress was made with respect to technical matters related to ballast water management, ship recycling, and measures helping to prevent and combat pollution of the sea from oil and other harmful substances.
Continued enhancements were made to regulatory measures in the field of maritime and supply chain security and their implementation, including the issuance of a new version of the World Customs Organization Framework of Standards to Secure and Facilitate Global Trade in June 2015, which includes a new pillar 3: “Customs-to-other Government and inter-government agencies”.
Meanwhile, as regards suppression of maritime piracy and armed robbery, positive developments were noted in the waters off the coast of Somalia and the wider western Indian Ocean. Concern remains, however, about the seafarers still being held hostage. A downward trend of attacks in the Gulf of Guinea was also observed, indicating that international, regional and national efforts are beginning to take effect.
Report highlights
Maritime transport is the backbone of international trade and the global economy. Around 80 per cent of global trade by volume and over 70 per cent of global trade by value are carried by sea and are handled by ports worldwide. These shares are even higher in the case of most developing countries.
UNCTAD’s Review of Maritime Transport has since 1968 provided coverage of key developments affecting international seaborne trade, shipping, the world fleet, ports, freight markets, and transport-related regulatory and legal frameworks.
The year 2015 is a milestone for sustainable development. The international community has a unique opportunity to strengthen its commitment to sustainable development and consider how best to mainstream sustainability principles across all economic activities and sectors, including maritime transport. In this context, in addition to the review of key economic and legal developments, the present edition of the Review of Maritime Transport highlights some issues that are at the interface of maritime transport and sustainability.
Chapter 1: Seaborne trade
The world economy embarked on a slow-moving recovery led by uneven growth in developed economies and a slowdown in developing countries and economies in transition. In 2014, the world gross domestic product (GDP) increased marginally by 2.5 per cent, up from 2.4 per cent in 2013. Meanwhile, world merchandise trade increased by 2.3 per cent; this is down from 2.6 per cent in 2013 and below the pre-crisis levels.
Chapter 2: The fleet
The world fleet grew by 3.5 per cent during the 12 months to 1 January 2015, the lowest annual growth rate in over a decade. In total, at the beginning of the year, the world's commercial fleet consisted of 89,464 vessels, with a total tonnage of 1.75 billion dwt. For the first time since the peak of the shipbuilding cycle, the average age of the world fleet increased slightly during 2014. Given the delivery of fewer new buildings, combined with reduced scrapping activity, newer tonnage no longer compensated for the natural aging of the fleet.
Chapter 3: Freight costs
Developing countries, especially in Africa and Oceania, pay 40 to 70 per cent more on average for the international transport of their imports than developed countries. The main reasons for this situation are to be found in these regions' trade imbalances, pending port and trade facilitation reforms, as well as lower trade volumes and shipping connectivity. Container freight rates remained volatile throughout 2014 although with different trends on individual trade lanes. The tanker market witnessed an equally volatile freight rate environment in 2014 and early 2015. The dry bulk market freight rates faced another challenging year influenced by the surplus capacity that still exists and the uncertainties in demand projections.
Chapter 4: Ports
Developing economies' share of world container port throughput increased marginally to approximately 71.9 per cent. This continues the trend of a gradual rise in developing countries' share of world container throughput. The economic, environmental and social challenges facing ports include growing and concentrated traffic volumes brought about by ever-increasing ship size; the cost of adaptation of port and port hinterland infrastructure measures; a changing marketplace as a result of increased alliances between shipping lines; national budget constraints limiting the possibilities of public funding for transport infrastructure; volatility in energy prices, the new energy landscape and the transition to alternative fuels; the entry into force of stricter sulphur limits; increasing societal and environmental pressure; and potential changes in shipping routes from new or enlarged international passage ways.
Chapter 5: Legal and regulatory framework
The Polar Code, establishing mandatory provisions to ensure ship safety and prevent environmental pollution in both Arctic and Antarctic waters, which was adopted at IMO and will enter into force on 1 January 2017. To further strengthen the legal framework relating to ship-source air pollution and the reduction of greenhouse gas (GHG) emissions from international shipping, several regulatory measures were also adopted at IMO and the third IMO GHG Study 2014 was finalized. In addition, guidelines for the development of the Inventory of Hazardous Materials required under the 2010 International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea (HNS Convention) were adopted, and further progress was made with respect to measures helping to prevent and combat pollution of the sea from oil and other harmful substances. Continued enhancements were made to regulatory measures in the field of maritime and supply chain security and their implementation. As regards suppression of piracy and armed robbery, an issue considered in some detail in a recent two-part report on maritime piracy prepared by UNCTAD, positive developments were noted, however, concerns remain about the seafarers still being held hostage.
At 11.4 percent of the value of imports, African countries paid more for international transport than any other region in 2005-2014
International transport costs amounted to a country average of 9 per cent of the value of imports during the decade 2005-2014, according to the UNCTAD Review of Maritime Transport 2015.
Globally, technological advances, economies of scale, improved trade and transport facilitation as well as more fuel efficient ships and trucks have all contributed to the trend of a long-term decline in international transport costs.
Among the main regional groupings, African countries paid the most (an average of 11.4 per cent), followed by Oceania (9.6 per cent), against an average of only 6.8 per cent for developed countries. UNCTAD has identified seven fundamental reasons behind the disparity in international transport costs and the relatively high cost of transport for African countries in particular:
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Many countries in Africa are landlocked, depending not only on the procedures of their own customs and other border agencies, but also on those of neighbouring transit countries. Many countries in Africa also report low scores in indicators such as the Doing Business Index or the Logistics Performance Index.
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Operating costs for vessel operators are the same overall, largely independent of routes or locations. These vary, however, depending on ship type and age. Routes with smaller and/or older vessels, such as those delivering most services that connect African countries, will have higher operating costs.
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In continental Africa, some countries have been able to benefit from their geographical position and offer trans-shipment services. Egypt, for example, benefits from the traffic passing through the Suez Canal, and Mauritius and Morocco both have established important hub ports. Most other African countries, however, are relatively far from the major East-West shipping routes.
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Several smaller African economies only provide relatively small markets. As a result, shippers may be confronted with oligopolistic markets, where low levels of competition may lead to higher prices.
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The types of manufactured goods imported into African developing countries tend to be of relatively lower value – that is, on average the cars, clothes or tools imported into Africa are of lower per-unit value than those imported into Europe or North America. Hence, the cost of transport increases as a percentage share.
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Many African developing countries are confronted with transport infrastructure bottlenecks. The largest ships that can be accommodated are far smaller than those that call at ports in other regions. Also, private sector participation through concessions is less frequent in developing countries in Africa. Both aspects empirically contribute to higher transport costs.
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Most countries in Africa have a merchandise trade deficit. As a consequence, ships are more likely to arrive fully loaded and have spare capacity when returning to China, Japan or Europe. Freight rates for imports will thus be higher than freight rates for exports.
UNCTAD suggests that there is potential for policymakers to remedy the situation through investments and reforms, especially in seaports, transit systems and customs administrations.
The Review of Maritime Transport 2015 also examines trends in container freight rates, which remained volatile throughout 2014. The report identifies different trends in the rates charged on individual routes that container ships take around the world and concludes that, despite the expansion in global demand for container shipping, there was no significant change in the market fundamentals determining rates. This was because of constant supply pressures on market rates from the introduction of very large ships in main East-West routes and the transferral of smaller, older ships to non-main North-South and regional routes.
The tanker market, which encompasses the transportation of crude oil, refined petroleum products and chemicals, witnessed an equally volatile freight rate environment in 2014, the report says. As a whole, the Baltic index for crude oil (Baltic Dirty Tanker Index) progressed by 21 per cent in 2014, reaching 777 points, whereas the Baltic Clean Tanker Index remained almost at the same level as in 2013, with 607 points, compared to 605 in 2013. In 2014, freight rates for both crude and product carriers increased in general for all vessel segments. Demand outperformed supply for the first time since 2010, leading to higher freight rates.
Despite a strong start and high expectations for a positive impetus carried over from 2013, dry bulk market freight rates faced another challenging year, influenced by surplus capacity and uncertainties in demand that still exist.
Developing countries’ share in the volume of global seaborne imports exceeded share of seaborne exports for the first time in 2014
The share of global goods loaded at developing country seaports was estimated at 60 per cent in 2014, while the import demand of developing countries, as measured by the volume of goods unloaded at their seaports, reached 61 per cent. This means that for the first time in recorded history, the developing country share in the volume of imports slightly exceeded their share in exports, according to estimates published in the UNCTAD Review of Maritime Transport 2015.
Developing countries have incrementally shifted patterns of trade as the distribution between the goods loaded and unloaded has changed significantly. No longer only sources of supply of raw materials, developing countries are also key players in globalized manufacturing processes now and a growing source of demand.
Developing countries’ share of global imports, measured by volume of unloaded goods grew, by 3 1/2 times, to reach 61 per cent in 2014 from just 18 per cent in 1970, UNCTAD data show. Asia continued to dominate as the main loading and unloading region in 2014, followed by continental America, Europe, Oceania and Africa.
According to UNCTAD, global seaborne shipments increased by an estimated 3.4 per cent in 2014. This represents an additional volume of more than 300 million tons, taking the total volume to 9.84 billion tons.
In addition, the Review of Maritime Transport 2015 calculates that growth in ton-miles performed by maritime transport was estimated to have increased by 4.4 per cent in 2014, up from 3.1 per cent in 2013 (the ton-mile unit, an accurate measure of demand for shipping services and tonnage, takes into account distance, which determines the transportation capacity of ships over time).
Dry bulk commodities, namely iron ore, coal, grain, bauxite and alumina, phosphate rock and minor bulk commodities accounted for nearly half of the total 52,572 estimated billion ton-miles performed in 2014. The ton-miles of dry bulks expanded firmly, at 6.4 per cent for major dry bulk commodities and 5.2 per cent for minor bulk commodities.
Apart from China, iron ore and coal demand from other fast-growing economies such as India and the Republic of Korea is now on the rise, and iron ore and coal import demand in Asia has contributed significantly to the growth in dry bulk trade volumes over recent years.
With crude oil volumes estimated to have contracted in 2014, the associated ton-miles remained flat, indicating growth in distances travelled. The average haul of crude oil trade to Asia was estimated at over 5,000 miles in 2014 – 9 per cent greater than 2005 levels.
Ton-miles generated by containerized trade were estimated to have increased by 5.4 per cent, driven by the recovery on the peak legs of the Asia-Europe and trans-Pacific trade routes as well as the continued rise in longer haul North-South trade volumes.
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Kenya Economic Update: Laying the foundation for strong growth in a challenging environment
Kenya’s economic performance remains solid, with the growth rate expected to improve from 5.3% in 2014 to 5.4% in 2015, according to a new World Bank Group economic report released today. It is projected to rise further to 5.7% in 2016.
The most recent Kenya Economic Update (KEU) attributes the growth to government investment in infrastructure, including railways, roads and energy, and strong consumer demand. The foundation for growth remains strong, the report says, though prospects for higher growth have moderated from the impact of external shocks, including the recent crisis in China and weak global currencies.
“Kenya has the potential to become one of the best performing economies in Sub-Sahara Africa and also among middle income countries,” said Diarietou Gaye, the World Bank’s Country Director for Kenya. “Managing the challenges emerging from the global economic environment will enable the government to deliver on the promise of a more prosperous future for Kenyans,” she added.
The current fiscal expansion presents a risk to growth, the KEU states. The current account deficit also remains high due to poor performance of the export sector, which has wiped out gains from lower oil prices.
“While heavy infrastructure spending is a boon for Kenya’s production space and future growth, the short to medium term fiscal framework is vulnerable to macroeconomic shocks,” said John Randa, World Bank senior economist and lead author of the report.
The KEU also highlights the importance of public participation at local levels. According to the report, county governments, with the support of the central authorities and the World Bank Group, have deepened constitutional and legal provisions for transparency, accountability and public participation to improve public service delivery at local levels.
“Strengthening citizens’ participation through participatory and inclusive processes is critical to the success of devolution,” said Christopher Finch, World Bank senior social development specialist, who is also one of the authors of the report. Setting up structures and systems to facilitate public participation is one of the priorities of the county governments.
The KEU, now in its 12th edition, is prepared by the World Bank Group in partnership with Kenya’s National Treasury and members of the Economic Roundtable. These include the Ministry of Devolution and Planning, Central Bank of Kenya, Kenya Revenue Authority, Kenya Vision 2030, Kenya Institute for Public Policy Research and Analysis, Kenya National Bureau of Statistics, National Economic and Social Council, International Monetary Fund, Office of the Controller of Budget, Council of Governors, Commission for the Implementation of the Constitution, Kenya School of Government and the Center for Parliamentary Studies and Training.
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Creating the necessary framework to mobilize sustainable energy investment in Africa: SE4All Africa Hub Annual Report
The Sustainable Energy for All (SE4All) Africa Hub launched on Tuesday, October 13 in Abidjan its Annual Report for 2014-2015, which outlines the progress made to date in helping the 44 partner countries create strategic frameworks necessary to mobilize investment for realizing their long-term energy goals aligned with the SE4All initiative objectives: ensure universal access to modern energy services, double the global rate of improvement in energy efficiency and double the share of renewable energy in the global mix by 2030, enshrined in the Sustainable Development Goal (SDG) 7 adopted end of September in New York.
Launched in 2013, the SE4All Africa Hub is a partnership between the African Development Bank, African Union Commission, the New Partnership for Africa’s Development (NEPAD) Planning and Coordination Agency, United Nations Development Programme (UNDP), and rotating regional economic communities dedicated to supporting the continent’s progress towards the SE4All objectives. The Hub is hosted by AfDB’s Energy, Environment and Climate Change Department.
The Hub provides guidance to African Governments and energy stakeholders, delivers technical assistance, fosters networking and communication, and contributes towards finance mobilization. A model of African leadership, the Hub has been at the forefront of SE4All’s implementation, contributed to the shaping of the initiative globally, and set a standard for others to follow. AfDB President Akinwumi Adesina in the foreword to the report highlights that “the SE4All Africa Hub plays an important role in forging the transformative partnerships needed to make access to energy for all a reality.” The Hub has also been tasked to play a lead role in the coordination of the implementation of the G20 Action Plan on Energy Access in Sub-Saharan Africa adopted by G20 Energy Ministers on October 2, 2015 in Istanbul in collaboration with the SE4All partnership.
Speaking about the report, SE4All Africa Hub Coordinator Daniel-Alexander Schroth said, “The last year was a successful year with the Hub being able to assist many African countries in laying the fundamental ground for mobilizing investments, yet this is only a first step, as the focus now has to shift decisively towards implementation.”
Over the past year, the Hub has been providing direct technical assistance in response to Government requests, to more than 10 African countries supported in most cases through the Pilot African Climate Technology and Finance Centre and Network. In addition, the Hub has supported the establishment of the West African Energy Leaders Group, which was launched successfully at the end of June 2015 in Abidjan. It also started the implementation of the Green Mini-Grid Market Development Program in cooperation with the Sustainable Energy Fund for Africa (SEFA) to scale-up the adoption of mini-grids as an important part of the solution to enhancing energy access in rural areas.
Moving ahead, the SE4All Africa Hub will focus on mobilizing support towards the implementation of the action agendas and investment prospectuses and the strengthening of SE4All focal points, communication and networking.
About SE4All
Launched in 2011, the Sustainable Energy for All (SE4All) Initiative aims to ensure universal access to modern energy services, double the global rate of improvement in energy efficiency and double the share of renewable energy in the global mix by 2030. The SE4All Action Agenda is a country-level umbrella framework for energy sector development with a long-term vision, ensuring overall sector-wide coherence and synergy of the accumulated efforts towards the three goals.
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Bank Financing of SMEs in Kenya
The involvement of Kenyan banks in the SME segment has grown remarkably over the last few years and most banks intend to continue expanding their SME portfolio in the near future. The segment has also received growing interest from policymakers and donors, recognising the pivotal role that SMEs play in economic development, investment and employment creation. Many SMEs, however, continue to lack appropriate financial services and have to rely on lending technologies that are expensive and often unsuited to their needs.
Banks often lack crucial information to inform their product development and expansion strategies due to a lack of systematic data collection and a common definition of the SME finance market. This also affects the work of the Government, regulatory authorities, and credit bureaus, as it makes it difficult to identify the key developments, challenges, and opportunities in the market.
FinAccess Business is a research project conducted jointly by FSD-Kenya, the World Bank, and the Central Bank of Kenya (CBK) to improve understanding of the SME market on both the supply and demand sides. Demand-side data continues to be limited due to the lack of a representative list of active business establishments in Kenya, which makes it difficult to track the size of the market as well as the evolving characteristics of the business population and their need for financial services. This is a major gap in the analysis of the Kenyan SME finance market, which will be analysed in a forthcoming, indepth report. The present report provides instead a comprehensive view of the supply-side of SME finance and its evolution between 2009 and 2013.
In addition to quantifying the size of the supply-side market and its growth rate, it shows the exposure of different types of banks in the segment, the portfolio of services most used by SMEs, and the quality of assets. The report also discusses the regulatory framework for SME finance, the drivers and obstacles of banks’ involvement with SMEs, and their specific business models.
The study shows that the total SME lending portfolio in December 2013 was estimated to be KSh332 billion, representing 23.4 per cent of the banks’ total loan portfolio. The SME portfolio grew fast in absolute values but also as a percentage of total lending: in 2009 and 2011 the total SME portfolio was estimated to be KSh133 and KSh225 billion, respectively, representing 19.5 and 20.9 per cent of total lending. These figures show that in the context of the general growth of the financial sector, SME financing is growing at a relatively fast rate, and is thereby representing a growing share of the commercial banks’ portfolios.
Based on the findings of the study, the banks’ business models in the SME finance market can be divided into three main types: the corporate-oriented business model (CBM), the supply-chain oriented business model (SBM) and the micro-enterprise oriented business model (MBM). Although banks may diversify between these categories, resulting in some overlap between the three categories, banks tend to differ in terms of lending technologies, customer acquisition strategies, and risk management mechanisms. Risk management strategies vary widely across banks and may be based on ‘hard information’, ‘soft information’, or a combination of the two. Hard information may consist of financial ratios calculated from certified audited statements and data assembled by credit bureaus. Soft information consists of non-financial information about the firm or entrepreneur, such as the sources of revenue or the borrower’s historical relationship with the bank.
While there have been positive developments over the last few years, there is still considerable room for product innovation in the SME finance space. A large number of SMEs continues to use overdrafts to finance their working capital needs, although banks have introduced several trade finance and asset finance products designed for the SME market. The development of other important SME finance products, such as factoring and financial leasing, has made some progress over the last few years but is still very limited. Developing such products is expected to lower transaction as well as borrowing costs for SMEs and reduce reliance on collateral by drawing on a more diverse set of information. The main constraint to financial leasing appears to be the ambiguous treatment of leasing in the Hire Purchase Act as well as the application of VAT. Potential constraints to the development of factoring, such as the recourse mechanism and the impact of stamp duties, need to be explored as well. In addition, it would be useful to study in more detail the potential and feasibility of an electronic reverse factoring platform similar to the one operated by Nafin in Mexico or factoring schemes as used in Paraguay or Peru. This could lower transaction and borrowing costs further and introduce more competition into that market segment while also increasing transparency.
The cost of credit for SMEs remains high due to a number of factors, including the limited use and sharing of positive information about borrowers, inefficiencies in the collateral registration process, the cost of the judicial process, and high overhead costs. The move towards positive information sharing by banks should go some way towards addressing these problems, but positive information sharing from all credit providers including payment service providers and utilities companies among others, would add great value to the information already present in the credit bureaus and should be prioritised going forward, provided that data quality can be ensured.
The collateral registry could be made more efficient in terms of the speed and the range of items accepted as collateral. Resolving the legal and regulatory challenges, especially regarding the contractual environment, will require significant reforms over a period of several years. Supporting the alternative dispute resolution system established by the Kenya Bankers Association (KBA) and the Association of Kenya Credit Providers (AKCP) would be a promising approach. Such a system would ensure that the majority of disputes are mediated and resolved prior to entering the judicial system, therefore avoiding lengthy judicial procedures.
While the Government sees its role in supporting SMEs primarily as market enabling and has largely avoided direct interventions in the SME finance space, several donors are active in supporting banks through credit lines or partial credit guarantees, often coupled with technical assistance. Given that the market for SME finance is relatively vibrant, the question is what gap donors are filling. Inevitably there is bound to be overlap in the donors’ involvement. Closer donor coordination could therefore be quite important in ensuring that resources are allocated effectively and are market enabling, and that they do not create an uneven playing field for market players. The government could play a stronger role in keeping track of the various donor initiatives to encourage transparency and a sharing of best practices across initiatives.
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Trade for All: European Commission presents new trade and investment strategy
The Commission is proposing a new trade and investment strategy for the European Union, entitled ‘Trade for All: Towards a more responsible trade and investment policy’.
The new approach builds on Europe’s excellent trade track record. EU companies export nearly as much as China to the rest of the world and more than firms in the United States or any other country.
More than 30 million jobs already depend on exports outside the EU. 90% of future global growth will happen outside Europe’s borders. A new strategy that will make trade agreements more effective and that will create more opportunities means supporting jobs in Europe.
The new strategy is also a direct response to the current intense debate on trade in the EU – including on the Transatlantic Trade and Investment Partnership (TTIP) that is being negotiated with the United States. It is also an implementation of the Juncker Commission’s pledge to listen and respond to European public’s concerns.
“We’ve listened to the debate,” said EU Trade Commissioner Cecilia Malmström. “Europeans know that trade can deliver jobs, growth and investment for consumers, workers and small companies. And they want more of those results. But they don't want to compromise on core principles like human rights, sustainable development around the world or high quality regulation and public services at home. And they want to know more about the negotiations we carry out in their name.
So trade policy must become more effective, more transparent and more in tune with our values. In short, it must become more responsible. That’s what we’re doing today.”
The new strategy will make EU trade policy more responsible by basing it on three key principles:
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Effectiveness: Making sure trade actually delivers on its promise of new economic opportunities. That means addressing the issues that affect today's economy, which involves services and digital trade. It also means providing the means and information necessary to ensure European small and medium-sized businesses (SMEs), consumers and workers can take full advantage of – and adapt to – more open markets. This means, for instance, including effective provisions for SMEs in future trade agreements.
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Transparency: Opening up negotiations to more public scrutiny by publishing key negotiating texts from all negotiations, as has been done in the TTIP negotiations. As of today, the Commission has already published some new texts (i.e. the Economic Partnership Agreements with East and West Africa) on its website.
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Values: Safeguarding the European social and regulatory model at home. Using trade agreements and preference programmes as levers to promote, around the world, European values like sustainable development, human rights, fair and ethical trade and the fight against corruption. This means to include anti-corruption rules in the EU's trade agreements, and to see that our trading partners implement provisions on core labour standards, like the rights of workers to organise and the abolition of child labour. It also means broadening efforts to ensure responsible management of supply chains.
A responsible EU trade strategy also requires an up-to-date programme of trade negotiations that can help shape globalisation to the benefit of European citizens, companies and beyond:
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It prioritises concluding major ongoing projects like the Doha Round of WTO talks, TTIP, the EU-Japan free trade agreement (FTA) and the EU-China investment agreement.
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It opens the door to new negotiations in the vital Asia-Pacific region (like Free Trade Agreements with Australia, New Zealand, the Philippines and Indonesia) and plans a deepening of the EU’s relationships with African partners. This includes specifically requesting a mandate from EU Member States for free trade negotiations with Australia and New Zealand.
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Modernising existing Free Trade Agreements with Mexico and Chile and the Customs Union with Turkey.
A responsible EU trade strategy has also to be in touch with the big challenges of our time. That’s why, just as the European Agenda for Migration calls for the better use of synergies across policy areas in order to incentivise the cooperation of third countries on migration and refugee issues, the trade policy should take into account the policy framework for the return and readmission of irregular migrants and, where relevant, visa facilitation.
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tralac’s Daily News selection: 14 October 2015
The selection: Wednesday, 14 October
Starting today, in Maputo: 2nd Nordic-Mozambican Conference on Inclusive Growth
Now available:
'Shaping economic transformation in Tanzania' (DEGRP/ REPOA), Global Goals, African Realities: building a sustainable future for all (Africa Progress Panel)
Concluded, in Abuja: the Accelerating Trade in West Africa contact group consultation (SAANA)
Accelerating Trade in West Africa is a new initiative aiming to establish a durable, multi-donor vehicle dedicated to advancing regional integration, expanding trade and lowering trade costs along key trade routes in West Africa. Working alongside regional Commissions, national government and the private sector, ATWA will address both “soft” policy and trade facilitation issues and “hard” infrastructure constraints to ensure meaningful impact. At present, donor support to regional trade and integration in West Africa is already substantial, but it is fragmented. This increases the complexity and transaction costs of regional efforts, for donors and recipients alike, and reduces the resources available for achieving meaningful results. ATWA rests on the idea that a more integrated approach could achieve better results. [Twitter: #ATWA]
Call for fast-tracking integration of sub regional Free Trade Areas (COMESA)
COMESA, EAC and ECOWAS sub regions should work out ways of integrating their respective Free Trade Areas to fast track the realization of the Continental Free Trade Area in the First 10 Years of the Implementation of Africa Agenda 2063. COMESA Secretary General Sindiso Ngwenya said the pragmatic approach, which has been accepted in principle by the African Union, is to build on what the different sub-regional economic communities have achieved. He was addressing the annual briefing of the African Regional Economic Communities to Member States of the United Nations and its entities that took place in New York Monday 12 October 2015.
Lapsset blow as Uganda signs pipeline deal with Tanzania (Daily Nation)
Kenya’s prospects of a crude oil pipeline through Hoima-Lokichar-Lamu could be crushed after Uganda signed an agreement with Tanzania to explore the Tanga route. If Uganda goes ahead to construct the pipeline through Tanzania, it will deal a major blow to Kenya’s Lamu Port-South Sudan-Ethiopia Transport corridor (Lapsset) project. Uganda, Tanzania, the Tanzania Petroleum Development Corporation and Total E&P Uganda signed a memorandum of understanding dictating new pipeline arrangements.
The European Union's regionalism diplomacy in Africa: an English School Approach (CRIS)
Instead, EU regionalism diplomacy should acknowledge and incorporate the anticolonial pan-African roots of African regionalism. Overall, the EU should seek a more diplomacy-focused, negotiated Africa-Europe interregional relationship. The paper concludes with an outline of a pan-African approach to regionalism diplomacy and avenues for future research. [The author: Ueli Staeger]
DRC: 2015 Article IV Consultation (IMF)
Policy recommendations: The authorities are urged to move swiftly to meet these challenges in order to preserve the hard-won gains and address rising inequality. In particular, they need to: (i) step up domestic revenue mobilization, (ii) reinforce the de-dollarization process and accumulate more international reserves; (iii) remove bottlenecks to private sector activity, (iv) strengthen governance and enhance transparency in the management of natural resources, and (v) implement the measures identified in the 2014 Financial Sector Assessment Program (FSAP) aimed at promoting both the soundness and inclusiveness of the financial system.
Economic expansion and the delay of democracy in Kinshasa (Daily Maverick), South Africa, DRC set to enhance cooperation (Shanghai Daily)
Nigeria, South Africa to boost diplomatic, trade relations (Footprint to Africa)
President Muhammadu Buhari will soon be hosting his South African counterpart on a state visit in Abuja as both leaders are now working to boost diplomatic relations of the two nations. This was revealed by the Vice President, Prof. Yemi Osinbajo. Osinbajo, who just returned from a visit to South Africa, also held brief meetings over the weekend with both President Jacob Zuma and Deputy President Cyril Ramaphosa, where issues of common interests to both Nigeria and South Africa were discussed.
Botswana shows interest in Angolan oil (Angola Press), Zimbabwe seeks to import more Botswana beef (Mmegi)
Namibia: The Retail Charter and the role of consumers (New Era)
This paper identifies important opportunities linked to growing local and regional demand, and what constraints exist for their exploitation. It identifies several areas of untapped, substantial opportunities for Zambia’s manufacturing sector. These opportunities include strengthening linkages to urban demand for processed food, increasingly structured around supermarket retail chains, and to copper mining demand for goods and services.
The potential for border development zones on South Africa's Northern border (TIPS)
There are challenges to using BDZs in South Africa, including the small size and underdeveloped nature of our neighbouring countries' economies. But border towns in South Africa are already the focus of zone development, with SEZs planned for both Mahikeng (on the Botswana border) and Musina (on the Zimbabwean border). Bringing elements of BDZs into these pre-existing SEZ projects could add extra punch to their development impact. How to make BDZs work in Mahikeng and Musina is the focus of ongoing research, but some preliminary suggestions are included in the study. These include: [The authors: Christopher Wood, Clarence Siziba]
South Africa: The role of business in local government and local economic development (SA Reserve Bank)
Let me firstly emphasise that the current environment is testing for small businesses. With agricultural output and mineral commodity prices down, the spending power arising from agriculture and mining-based communities and enterprises is under considerable downward pressure. This also triggers various multipliers and accelerators in the economy, working in reverse gear and extending the pain to other sectors, capital expenditure and the like. Secondly, every opportunity should be grasped and, as indicated above, the depreciated external value of the rand may be one such opportunity, bringing about more attractive relative prices of exports and import-substituting goods and services. Agile businesses that can respond appropriately stand to benefit. [The author: Francois Groepe, Deputy Governor]
Rwanda: New platforms to boost public-private sector dialogue (New Times)
Government is seeking to establish more than 20 new platforms to strengthen public-private sector dialogue. The initiative seeks to enhance efficiency and boost competitiveness of the small and medium entrepreneurs. The platforms will mainly focus on the agriculture sector, leather industry, Information Communication Technology and the SMEs among others. They will also focus on the major business constraints including limited access to finance, high tax rates and inadequate infrastructure.
East Africa left to rue as Africa bags $87bn in foreign direct investments (New Times)
In its 2015 Africa Investment Report, the Financial Times indicates that coal, oil and gas, as well as manufacturing, were the most attractive sectors, accounting for 38 and 33%, respectively, of the total announced FDI last year. In total, 464 foreign companies invested in Africa last year but this number only accounted for 13% of the global FDI capital in 2014 and just 5% of the total projects registered. Western Europe was the largest source of FDI to Africa last year with 252 projects followed by intra-Africa investments that accounted for at least 131 projects. East African economies almost failed to make it to the top ten destinations for FDI in 2014 after Kenya was placed at the bottom of a list topped by Egypt and Angola which claimed 21 and 19%, respectively, of the total capital invested last year. [African Department press briefing transcript (IMF)]
Committee on Trade and Development: summary report of the Fifth global review of Aid for Trade - 'Reducing trade costs for inclusive, sustainable growth' (WTO)
A clear theme throughout the discussions at the Review was that trade costs matter. High trade costs act as a barrier on the integration of developing countries into regional and global value chains, and thereby into the global economy. The sessions at the Review showed that this is especially true for LDCs, landlocked developing countries and geographically remote, small economies. All these countries are particularly weighed down by heavy trade costs. Action to reduce trade costs will help deliver the Sustainable Development Goals, and the implementation of the WTO's Trade Facilitation Agreement (TFA) will be an important step in this direction.
African Cargo for African Ship Owners: update from the First African Maritime Conference (AU)
The outcomes of the meeting spotlight the necessity for having: A Single African Maritime Transport Market to be adopted among the first-track projects under the First Ten-Year Implementation Plan of Agenda 2063 along the lines of the “Single African Air Transport Market”; an African fleet; an African Cabotage; a Legal framework for African Fleet; facilitating the financing of ships; building ships in Africa; job creation as well as education.
Strategic importance of maritime security in the Gulf of Guinea (US Africa Command)
At the regional level, the conference will be an important step in the implementation of the 2013 Yaoundé Code of Conduct. Angola is a leader in addressing conflicts on the continent and, with an extensive coastline, has an important role and interest in addressing the continent’s blue economy and maritime concerns as well. President Jose Eduardo dos Santos decided in our first meeting together that Angola would host the maritime and energy conference, since then our two countries have collaborated closely on organizing the event. The United States is pleased to partner with Angola through AFRICOM, on this important initiative to support the protection of the blue economy in the Gulf of Guinea. [The author: Amb Helen La Lime, Luanda] [Remarks by Gen David Rodriguez]
Bagamoyo port to handle fourth generation ships (IPPMedia)
The envisaged port of Bagamoyo will have no competitor along the eastern Africa Indian Ocean because it will handle fourth generation ships, the government has said. Yesterday Industry and Trade Permanent Secretary Uledi Musa dismissed fears of the new port facing stiff competition from other ports in the region as unfounded. He said in Dar es Salaam that the US$10 billion harbour will not be competing with the ports of Djibouti, Mombasa, Dar es Salaam, Beira and Durban because it will handle only mega ships.
Sh31bn terminal at port of Mombasa to be ready in June (Daily Nation), Kisumu port banks on EAC integration to revive operations (Business Daily), Mtwara Port handling capacity set to increase (Tanzania Daily News), France maritime investors target Ghana’s ports (Footprint to Africa)
Expanding social protection offers a faster track to ending hunger – UN report (UN)
The State of Food and Agriculture 2015 shows that in poor countries, social protection schemes – such as cash transfers, school feeding and public works – offer an economical way to provide vulnerable people with opportunities to move out of extreme poverty and hunger and to improve their children's health, education and life chances. According to FAO, such programmes currently benefit 2.1 billion people in developing countries in various ways, including keeping 150 million people out of extreme poverty. Expanding such programs in rural areas and linking them to inclusive agricultural growth policies would rapidly reduce the number of poor people, the report says. [Downloads]
The BRICS Partnership and Multi-level Governance: an unexplored dimension (GCIS)
The international conference seeks to explore how multi-level government – a dominant feature in all five BRICS countries – is impacted on and, in turn, may impact on the BRICS’s economic and social development initiative. Of particular importance is the role of domestic intergovernmental fiscal relations and metropolitan cities. The conference will be an engagement between academics, thinks tanks and officials of the BRICS countries. Scholars and officials from BRICS countries will present 15 papers.
Counties now key selling points for Kenya’s opportunities (Daily Nation)
Ongoing expos to market the 47 counties as investment hubs have created a platform that places Kenya on the world map as a land of opportunities. Kenya Investment Authority General Manager in charge of Investment Promotion Mr Pius Rotich said the agency is partnering with counties to create a database for all investment opportunities.
Briefing by African RECs: 'Silencing the guns in Africa: the nexus between peace, security, governance and development' (UN)
Following the successful launch of Africa Week 2015, Member States gathered in the afternoon to hear from African Regional Economic Communities about their efforts to silence the guns in Africa by 2020. [Various downloads available] [UNSC unanimously adopts landmark text on women, peace, security agenda (UN News Centre)]
China foreign trade decline narrows in September (Xinhua)
China's foreign trade dropped 8.8% year on year in September to 2.22 trillion yuan (about $352bn), less severe than the 9.7% contraction in August, official data showed on Tuesday. Exports dropped 1.1% to 1.3 trillion yuan and imports decreased 17.7% to 924 billion yuan. Exports to emerging markets have been rising. Foreign trade grew 5.8% with ASEAN, 8.7% with India, 1.3% with Latin America and 6.1% with Africa.
New EU Trade and Investment Strategy proposals (EU)
India opposes proposed European Trademark rules (LiveMint)
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When global goals meet African realities: new report sets out an agenda for change
The new Sustainable Development Goals will only succeed if they can succeed in Africa. How can we make that happen? A new report from the Africa Progress Panel, Global Goals, African Realities, lays out a roadmap for meeting the goals and transforming lives on the continent.
Africa’s rapidly growing population most needs the change described by both the SDG agenda and the Africa Progress Panel: economic development that leaves no one behind and gives every child a fair chance of leading a decent life. Like the SDGs, Global Goals, African Realities faces squarely our duty to protect future generations by limiting climate change, adopting renewable energy and managing resources sustainably.
The Africa Progress Panel, led by Kofi Annan – the father of the Millennium Development Goals – works to ensure that Africa’s resources, creativity and dynamism are harnessed for the benefit of all Africans. Global Goals, African Realities, brings together findings and recommendations from four editions of the panel’s annual report – including recommendations that have been adopted at the highest levels.
Can the world prevent catastrophic climate change while building the energy systems needed to sustain growth, create jobs and lift millions of people out of poverty? That question, which goes to the heart of the SDG agenda, is tackled in the 2015 Africa Progress Report, Power, People, Planet: Seizing Africa’s energy and climate opportunities.
Solving Africa’s interlocking climate and energy problems will require strengthened international cooperation. The global climate talks in December provide a platform for deepening cooperation and making a down-payment on measures with the potential to put Africa on a pathway toward an inclusive low-carbon energy future and the world on a pathway to avoid climate catastrophe.
The 2014 Africa Progress Report, Grain, Fish, Money: Financing Africa’s blue and green revolutions, examines the vast potential of the sector that most poor Africans work in – agricultural production. The report highlights the gulf between that potential and the growing dependence on food imports. Closing that gulf would provide a powerful catalyst for reducing poverty, generating jobs, feeding urban populations and creating new market opportunities for investment.
Grain, Fish, Money also turned the spotlight on the continued massive plunder of vital African resources, including fish stocks and forests. Illegal, unregulated and unreported fishing has reached epidemic proportions in Africa’s coastal waters.
The 2013 Africa Progress Report, Equity in Extractives: Stewarding Africa’s natural resources for all, showed that in many countries, revenues from oil, gas and mining have been widening the gap between rich and poor. A decade of highly impressive economic growth, spurred largely by global demand for African commodities, has not brought comparable improvements in health, education and nutrition.
The report outlines why African and OECD governments should be cooperating far more closely to address systemic tax evasion, the outright plunder of valuable assets and the extensive use of off-shore tax havens by foreign and domestic investors.
The 2012 Africa Progress Report, Jobs, Justice and Equity: Seizing opportunities in times of global change, called on African leaders to tackle the deep, persistent and enduring inequalities across the continent. Countries across Africa are becoming richer but whole sections of society are being left behind. After more than a decade of buoyant growth, almost half of Africans still live on less than $1.25 a day. The current pattern of trickle-down growth is leaving too many people in poverty, too many children hungry and too many young people without jobs.
Viewed through the lens of the SDGs, the equitable growth agenda is more relevant than ever: on current trends one-third of Africans will still be living in extreme poverty in 2030. Africa will account also for a rising share of child and maternal deaths and out of school children.
The vision behind Global Goals, African Realities is the same as the vision behind the SDGs: the need to manage resources wisely and sustainably so that every citizen has a fair chance of leading a healthy, prosperous, fulfilling life, free of poverty. Many African countries are rising to that challenge. Indeed, Africa can help feed the globe’s burgeoning population, spearhead technical innovations, and lead the world on climate-resilient, low-carbon development.
As Kofi Annan says, “Africa is on its way to becoming a preferred investment destination, a potential pole of global growth, and a place of immense innovation and creativity. But there is also a long way to go – and Africa’s governments must as a matter of urgency turn their attention to those who are being left behind. I believe Africa and its leaders can rise to this challenge. If they do, Africa will become more prosperous, stable and equitable.”
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Fifth Global Review of Aid for Trade Summary Report: Reducing trade costs for inclusive, sustainable growth
The theme of the Fifth Global Review of Aid for Trade, held from 30 June to 2 July 2015, was “Reducing Trade Costs for Inclusive, Sustainable Growth”.
Discussions focused on the implications of trade costs for developing countries, and in particular least developed countries, and analysed actions already undertaken by developing countries, regional communities and their development partners to reduce trade costs. The Review also surveyed the extent of the challenge remaining, and how it could be addressed in the context of the proposed UN’s Sustainable Development Goals.
The debate was informed by a series of publications that discussed the results of a global extensive monitoring and evaluation exercise, notably the flagship joint OECD-WTO publication “Aid for Trade at a Glance 2015: Reducing Trade Costs for Inclusive, sustainable Growth” which, for the first time, was prepared in collaboration with the Enhanced Integrated Framework, the International Trade Centre, the United Nations Conference on Trade and Development, the World Bank Group, and the World Economic Forum. This publication brings together summary reports of the Plenary Sessions and Side Events held during the Fifth Global Review event.
Foreword by the Director-General
We have come a long way since the Aid-for-Trade Initiative was launched ten years ago in 2005. During this period the Initiative has gained an enhanced global profile and has helped push the aid for trade envelope from around US$25 billion in the period 2002-05 to over US$55 billion in 2013. Successive biennial Global Reviews of Aid for Trade have established this forum as a high-level multilateral dialogue on not just aid for trade, but also on a range of key trade and development issues. Global Reviews provide a platform to examine how developing, and in particular least developed countries (LDCs), are better able to utilize market access opportunities through targeted aid for trade; how this is assisting their integration into the global economy; how development partners are helping in this process; and above all the effectiveness of this support.
The Fifth Global Review of Aid for Trade, held on 30 June – 2 July 2015, was timely. Not only does 2015 mark the tenth anniversary of the Initiative and the twentieth anniversary of the WTO, it is also a landmark year for the global development community. The Global Review sent a powerful message of the central importance of trade and the multilateral rules based system in the context of the UN’s Sustainable Development Goals and the Post-2015 Development Agenda.
A clear theme throughout the discussions at the Review was that trade costs matter. High trade costs act as a barrier on the integration of developing countries into regional and global value chains, and thereby into the global economy. The sessions at the Review showed that this is especially true for LDCs, landlocked developing countries and geographically remote, small economies. All these countries are particularly weighed down by heavy trade costs.
Action to reduce trade costs will help deliver the Sustainable Development Goals, and the implementation of the WTO’s Trade Facilitation Agreement (TFA) will be an important step in this direction. The experiences of many in supporting and enacting border reforms were shared during the Global Review – with new initiatives being outlined. Light was shed on where to find support for TFA implementation, particularly as regards the TFA Facility that began operation in 2014. The Enhanced Integrated Framework also launched Phase 2 of its programme to support LDCs during the Review.
Over 1,500 participants registered for this year’s Global Review, providing rich contributions to a total of 18 plenary sessions and 28 side events. We were delighted by the high level of participation, including heads of many multilateral and regional development institutions and ministers from developed and developing countries, across all three days of the event.
This publication provides a summary of the discussions of the Fifth Global Review. I hope it will contribute further to reaffirming the Aid-for-Trade Initiative as an integral component of trade-led economic growth and development – a component which will only become more important as work to deliver the global Sustainable Development Goals gets underway.
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Africa’s Regional Economic Communities and Member States re-iterate the importance of “Silencing the Guns” in the continent by 2020
Following the successful launch of Africa Week 2015, Member States gathered in the afternoon to hear from African Regional Economic Communities about their efforts to silence the guns in Africa by 2020.
The annual briefing was co-chaired by H.E. Mr. Mahamat Zene Cherif, Permanent Representative of the Republic of Chad to the United Nations, and Under-Secretary-General and Special Adviser on Africa, Mr. Maged Abdelaziz. H.E. Mrs. Fatoumata Sidibe Kaba, Permanent Representative of Guinea to the African Union and Representative of the Chair of the African Union Peace and Security Council for the Month of October delivered the opening remarks. High-level officials representing seven African regional and sub-regional organizations, as well as representatives of a number of key partners of the continent were also present.
In his welcome remarks, Mr. Abdelaziz commended the continued efforts and contributions of the RECs towards Silencing the Guns by 2020, noting that it was a momentous task needing action at all levels, across the nexus of peace, security, governance, human rights and development. He underscored the need for a more holistic and integrated approach in addressing the nexus, with greater policy coherence and a more sustainable and reliable financing architecture.
H.E. Mr. Mahamat Zene Cherif decried the continued use of illicit small arms and light weapons (SALW) by rebels, gangs, criminal organizations, pirates, terrorist groups and insurgents to fuel conflict in Africa. He called on all African States to accede to the Arms Trade Treaty (ATT) which lays the foundations for a global framework of arms transfer controls, including for small arms, light weapons and ammunition.
H.E. Mrs. Fatoumata Sidibe Kaba reiterated the need to address the unemployment schism affecting the bulging youth population in Africa. She called for greater efforts to enhance socio-economic development in the continent, including through improvements in healthcare, education, job creation, efficient use of natural resources, to name a few, noting that a prosperous Africa help silence the guns in the continent, and deter conflicts and
Various salient points emerged from the statements made by the representatives of the RECs and various speakers and the interactive discussions during the briefing. These included the call for greater support and resources for regional and subregional efforts and instruments to prevent and respond to conflicts as a whole.
The RECs also underscored the need to build stronger partnerships between the UN-AU and its RECs, including through the UN/AU Partnership on Africa’s Integration and Development Agenda (PAIDA), in support of the comprehensive continental architecture developed by the AU.
The meeting also stressed the need to address the causes of conflict on the continent, recalling some of the factors driving persisting cases, despite the multiple commitments and efforts deployed to end them.
Several speakers called for increased action to combat the illicit proliferation of small arms and light weapons, identifying it as a major challenge to silencing the guns in Africa.
The RECs emphasized the importance of conflict prevention and achieving durable peace in Africa, including by building inclusive societies in which all citizens, especially women and the youth, can fully participate and which respect diversity, the rule of law, human rights and democratic governance, while fostering investments in job creation, education, infrastructure development and agriculture to provide sustainable livelihoods, particularly for the youth.
Background
About the meeting
As part of Africa Week 2015, the Office of the Special Adviser on Africa convened the Annual High-level Briefing by African Regional Economic Communities (RECs) to Member States and Entities of the United Nations on the margins of the 70th Session of the General Assembly Debate on Africa.
The briefing, jointly organized with the Permanent Observer Mission of the African Union to the United Nations and the Permanent Mission of the Republic of Chad to the United Nations, was co-chaired by H.E. Mr. Mahamat Zene Cherif, Permanent Representative of the Republic of Chad to the United Nations, and Mr. Maged Abdelaziz, Under-Secretary-General and Special Adviser on Africa.
Briefings were made by the Chief Executive Officers or Senior Representatives of seven RECs.
The briefing also featured interventions from the African Union, given its lead role in the development of the proposed continental framework on silencing the guns by 2020. In addition, senior United Nations officials highlighted perspectives from the United Nations on how to further enhance cooperation and support to the African Union and the RECs in advancing the target on silencing the guns by 2020.
A Conflict-free Africa
The African Union and its Member States as well as its regional and sub-regional organizations, with the support of the international community, continues to accelerate actions to achieve a conflict-free Africa and end all wars in Africa by 2020. This is in keeping with its vision and determination to build “an integrated, prosperous and peaceful Africa, driven and managed by its citizens, and representing a dynamic force in the international arena,” as emphasized in the 50th Anniversary Solemn Declaration of the Organization of African Unity/African Union. In order to realise this vision and objective, the African Union further adopted the historic Agenda 2063 and its First Ten-Year Implementation Plan (2014-2023) that collectively outline a set of aspirations, goals, priority areas, milestones and targets for, inter alia “Silencing the Guns by 2020.”
With only five remaining years to 2020, the African Union has accelerated efforts at particularly the continental and regional levels to address priority issues and concerns for the realization of this target to silence the guns in Africa by 2020. Given their proximity to the ground, the RECs have a crucial role to play, together with the African Union and international community, in ensuring concerted and coordinated efforts and actions at especially regional, sub-regional and national levels towards realising the goal of silencing the guns by 2020.
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Expanding social protection offers a faster track to ending hunger
Programmes proliferate but vast majority of rural poor remain uncovered by social protection
Social protection is emerging as a critical tool in the drive to eradicate hunger, yet the vast majority of the world’s rural poor are yet to be covered.
The State of Food and Agriculture 2015 published by FAO on 13 October finds that in poor countries, social protection schemes – such as cash transfers, school feeding and public works – offer an economical way to provide vulnerable people with opportunities to move out of extreme poverty and hunger and to improve their children’s health, education and life chances.
Such programmes currently benefit 2.1 billion people in developing countries in various ways – including keeping 150 million people out of extreme poverty.
Expanding such programs in rural areas and linking them to inclusive agricultural growth policies would rapidly reduce the number of poor people, the report says.
The report was released on the eve of World Food Day (16 October), whose focus is on social protection’s role in breaking the cycle of rural poverty.
“It is urgent that we act to support the most vulnerable people in order to free the world of hunger,” said FAO Director-General José Graziano da Silva.
“Social protection programs allow households to access more food – often by increasing what they grow themselves – and also make their diets more diverse and healthier. These programs can have positive impacts on infant and maternal nutrition, reduce child labor and raise school attendance, all of which increase productivity,” he said.
Breaking out of the hunger trap
Only about a third of the world’s poorest people are covered by any form of social protection. Coverage rates dip even lower in South Asia and sub-Saharan Africa, regions with the highest incidence of extreme poverty, the report said.
Without such assistance, many poor and vulnerable people will never have the opportunity to break out of the poverty trap – in which hunger, illness and lack of education perpetuate poverty for future generations, according to the report.
Most countries – even the poorest – can afford some kind of social protection program. FAO estimates that globally, some $67 billion a year in income supplements, mostly provided by social protection programs, would – along with other targeted pro-poor investments in agriculture – allow for the eradication of hunger by 2030. That is less than 0.10 percent of world GDP.
Understanding social protection
Currently many extremely poor households are forced to sell off productive assets, put children to work, over-exploit their small landholdings unsustainably, or settle for badly paid jobs.
Yet basic social transfer schemes offer the poor an opportunity to improve their own productive potential. They also have positive spillover effects on local economies, increasing business opportunities, raising rural wages, and allowing the poorest to acquire or invest in assets.
In Zambia for example, a pilot cash-grants program led recipient households to greatly increase livestock ownership as well as land under cultivation, input use and ownership of tools such as hoes, sickles and axes, leading to a 50 percent jump in the overall value of locally produced agricultural commodities.
Beneficiaries also spent more on food, clothing and health-and-hygiene – an amount 25 percent greater than the value of the initial transfer. The wider community also benefited through the increased demand for locally produced goods and services generated by the transfer-every dollar transferred generates an additional 79 cents in income, often for non-beneficiaries providing these goods and services.
At least 145 countries today provide one or more forms of social assistance, including unconditional cash transfers, meaning outright grants for eligible recipients, conditional cash transfers, usually linked to school attendance or health checkups and, public-works programs that offer guaranteed employment. Other forms include in-kind transfers, including food distribution and school feeding programs.
Cash means more than spending
The report stresses that the notion that social protection reduces people’s work effort is a myth. Rather, recipients often respond to social protection positively, including improving the nutrition and education of their children, relying more on home production rather than poorly paid wage work and also increasing their participation in existing networks such as funeral societies, a common form of risk management in many traditional communities.
Social protection schemes can also be transformative over time. One well-designed Bangladeshi programme gave poor rural women livestock and other productive assets, as well as a monthly stipend to cover the period until recipients were able to earn additional incomes.
The FAO report also cites other successful examples of social protection programs in Ethiopia, Ghana and Lesotho.
Such findings show how social protection is an investment, rather than a cost. It is also clearly illustrated by Brazil’s Bolsa Família, a well-integrated scheme that reaches a quarter of the country’s population and costs only 0.5 percent of GDP.
Still, the report stresses how social protection alone cannot sustainably eradicate hunger and rural poverty. It therefore underscores the importance of combining and coordinating public investment in social protection with public and private investments in the productive sectors of agriculture and rural development. Such actions will ensure inclusive economic growth as a sustainable way to break the cycle of rural poverty.
Key messages
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Social protection programmes reduce poverty and food insecurity. Effective targeting and adequate transfers are important determinants of success. Social protection contributes to higher incomes and food security not only by ensuring increases in consumption, but by enhancing a household’s ability to produce food and augment income. Programmes targeted at women have stronger food security and nutrition impacts. Programmes that are gender-sensitive, reduce women’s time constraints and strengthen their control over income enhance maternal and child welfare. This is especially important because maternal and child malnutrition perpetuate poverty from generation to generation.
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Programmes targeted at women have stronger food security and nutrition impacts. Programmes that are gender-sensitive, reduce women’s time constraints and strengthen their control over income enhance maternal and child welfare. This is especially important because maternal and child malnutrition perpetuate poverty from generation to generation.
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Social protection stimulates investment in agricultural production and other economic activities. Social protection enhances nutrition, health and education, with implications for future productivity, employability, incomes and well-being. Social protection programmes that provide regular and predictable transfers promote savings and investment in both farm and non-farm activities, and encourage households to engage in more ambitious activities offering higher returns.
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Social protection does not reduce work effort. But it does give beneficiaries greater choice, and many shift time previously dedicated to casual agricultural wage employment of last resort to ownfarm work or non-agricultural employment. Taken together with the increase in farm and non-farm production activities, social protection strengthens livelihoods instead of fostering dependency.
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Social protection has virtuous impacts on local communities and economies. Public works programmes can provide important infrastructure and community assets and, when designed and implemented properly, contribute directly to the local economy. Cash transfers increase the purchasing power of beneficiary households, who demand goods and services, many of which are produced or provided in the local economy by non-beneficiary households. Complementary programmes may be necessary to reduce production constraints to prevent inflation and maximize the real-income and production impacts of the programme.
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Social protection, by itself, is not enough to move people out of poverty. As poor households typically face multiple constraints and risks, joint, coordinated and/or aligned social protection and agricultural programmes are likely to be more effective in helping poor households move out of poverty in a sustainable manner.
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There are clear opportunities to leverage social protection and agriculture programmes to further rural development. Developing synergies is an opportunity and also a necessity because of constrained government budgets. It is imperative to help the poorest meet basic consumption needs, especially when they are unable to work. Such help can itself become a foundation for gradual improvement of the livelihoods of the poor. Given that the majority of the rural poor depend largely on agriculture, agricultural interventions are needed to overcome structural supply-side bottlenecks holding back growth. Leveraging public expenditures on agriculture and social protection programmes in support of each other not only furthers this transformation, but also serves to strengthen agricultural and rural development.
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A national vision is needed of how agriculture and social protection can gradually move people out of poverty and hunger. National vision and commitment, supported by permanent domestic resource mobilization, must support coordinated action at the national and subnational levels. Policy and planning frameworks for rural development, poverty reduction, food security and nutrition need to articulate the role of agriculture and social protection in moving people out of poverty and hunger, together with a broader set of interventions. The type of agricultural interventions combined with social assistance depends on the context and constraints, but must also consider issues such as local implementation capacities and available resources. In all cases, interventions must be designed to address a range of constraints to allow the poorest to transform their livelihood strategies to escape and remain out of poverty.
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Could Europe’s historical trade links offset China slump?
Fears that a slowing China will cause world trade to stagnate could be overstated, given European nations’ long-standing trade links with emerging markets (EMs) across Latin America, Asia and Africa, experts have told CNBC.
“It sometimes slips under the radar quite how important Europe is for EMs (emerging markets),” William Jackson, senior EM economist at Capital Economics, told CNBC.
The European Union (EU) group of 28 countries is the world’s largest trading bloc, the largest trader of manufactured goods and services and the top trading partner for 80 countries, according to the bloc’s official website, which says that the U.S. is the top trading partner for only around 20 countries.
“Fuels excluded, the EU imports more from developing countries than the USA, Canada, Japan and China put together,” the website says.
Jackson and other economists highlight that the EU remains the largest export market for both Sub-Saharan Africa and eastern Europe and is also among the largest trading partners for Latin America.
“While much attention has focused on the role of China in slowing world trade growth, the trajectory of world trade growth from here depends more on the ‘old world’ markets of the U.S. and Europe than standard trade data would suggest,” said Adam Slater, lead economist at Oxford Economics, in a report out last week.
The slowdown in China cut around 0.5 percentage points from year-on-year world trade growth in the first half of this year, Slater said. However, in his opinion, this importance of China is overstated by standard trade data, in part because the trade growth figures cannot account for all the goods flowing into and out of the country.
“We should arguably be a bit less concerned about the import slowdown in China, which has already happened, and more so about what happens next in the U.S. and Europe,” he added.
Colonial era ties
Many of the strong trade links between emerging markets and Europe date back to colonial times, when Britain and France led the way in a race to paint the world in their home colors.
In Africa, for instance, many former colonies maintain trade links with their ex-colonial power that are as strong or stronger than those with either neighboring countries or with the relatively newcomer of China – despite the decades that have passed since Britain and France relinquished their empires.
“Colonial links are very strong; it is incredibly how strong they still are given the years that have passed,” Ravi Bhatia, a director at Standard & Poor’s who specializes in Africa, told CNBC on Monday.
“If you compare the intra-Africa trade with the trade between former colonial powers and ex-colonies, it is very much at the same sort of level. Intra-Africa trade is picking up a lot now, but it has been pretty low in the past.”
France, for example, remains a major trading partner for many of its ex-colonies, such as Cote d’Ivoire, Gabon and Cameroon in sub-Saharan Africa and Morocco in North Africa.
Similarly, the British are “very comfortable” trading with former colonies like Kenya, Bhatia said, citing “common language, common culture, established trading links and knowledge of the market from both sides” when explaining why the ties between colonizers and colonized remained strong.
Trade between the EU and sub-Saharan Africa reached $205 billion in 2014, up from $66 billion in 2000, according to Standard Chartered Bank. It remains relatively concentrated in both directions, with the former colonial powers of Germany, France and the U.K. accounting for a little less than 45 percent of EU-sub-Saharan Africa trade.
By comparison, trade between China and sub-Saharan Africa topped $170 billion in 2013, up from negligible levels in 2000, according to the World Bank.
Trade leads to… investment
These trade ties also provide indirect benefits in the form of foreign direct investment (FDI) links, Jackson told CNBC.
“This is perhaps most notable in central and eastern Europe where, following the end of communism, manufacturers became integrated into German supply chains (supported by FDI flows from west to east). But the EU is also the single largest source of investment into Sub-Saharan Africa and a major investor into Latin America,” he said on Monday.
“The key point here is that this investment then supports transfers of technology (as well as intangible benefits such as transfers of knowledge, know-how, management techniques, et cetera), which raises productivity and allows for a sustainable rise in incomes and living standards.”