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World deforestation slows down as more forests are better managed
FAO publishes key findings of global forest resources assessment
The world’s forests continue to shrink as populations increase and forest land is converted to agriculture and other uses, but over the past 25 years the rate of net global deforestation has slowed down by more than 50 percent, FAO said in a report published today.
Some 129 million hectares of forest – an area almost equivalent in size to South Africa – have been lost since 1990, according to FAO’s most comprehensive forest review to date, the Global Forest Resources Assessment 2015.
It noted however, that an increasing amount of forest areas have come under protection while more countries are improving forest management. This is often done through legislation and includes the measuring and monitoring of forest resources and a greater involvement of local communities in planning and in developing policies.
The FAO study covers 234 countries and territories and was presented at this week’s World Forestry Congress in Durban, South Africa.
“Forests play a fundamental role in combating rural poverty, ensuring food security and providing people with livelihoods. And they deliver vital environmental services such as clean air and water, the conservation of biodiversity and combating climate change,” said FAO Director-General José Graziano da Silva, launching the report in Durban.
He noted an “encouraging tendency towards a reduction in rates of deforestation and carbon emissions from forests,” as well as improved information that can inform good policy, noting that presently national forest inventories cover 81 percent of global forest area, a substantial increase over the past 10 years.
“The direction of change is positive, but we need to do better,” the FAO Director-General cautioned. “We will not succeed in reducing the impact of climate change and promoting sustainable development if we do not preserve our forests and sustainably use the many resources they offer us,” he added.
Main findings
While in 1990 forests made up 31.6 percent of the word’s land areas, or some 4 128 million hectares, this has changed to 30.6 percent in 2015, or some 3 999 million hectares, according to FRA.
Meanwhile, the net annual rate of forest loss has slowed from 0.18 percent in the early 1990s to 0.08 percent during the period 2010-2015.
Today, the bulk (93 percent) of the world’s forest area is natural forest – a category that includes primary forest areas where human disturbances have been minimized, as well as secondary forest areas that have regenerated naturally.
Planted forest, another subcategory, currently accounts for 7 percent of the world’s overall forest area, having increased by over 110 million hectares since 1990.
FAO’s report stresses the critical importance of forests to people, the environment, and the global economy.
The forest sector contributes about $600 billion annually to global GDP and provides employment to over 50 million people.
Biggest losses in Africa and South America
Africa and South America had the highest net annual loss of forests in 2010-2015, with 2.8 and 2 million hectares respectively, but the report notes how the rate of loss has “substantially decreased” from the previous five year period.
Since 1990 most deforestation has taken place in the tropics. In contrast, net forest area has increased in temperate countries while there has been relatively little change in the boreal and subtropical regions.
However, given global population growth, average per capita forest area has predominantly declined per person in the tropics and subtropics, but also in all the other climatic regions with the exception of the temperate.
Better-managed forests
Globally, natural forest area is decreasing and planted forest area is increasing and while most forests remain publicly owned, ownership by individuals and communities has increased. In all cases FAO stresses the importance of sustainable forest management practices.
Natural forests, the least touched by humankind, contribute to conserving genotypes – the genetic constitutions of organisms – and in maintaining the composition of natural tree species while providing vital habitats to endangered animal species.
Forests help replenish groundwater supplies crucial for drinking, agriculture and other uses. They also protect soils from erosion, avalanches and landslides.
Planted forests, for their part, are often established for production and where well-managed can provide various forest goods and service and help reduce the pressure on natural forests.
This must also be seen in the context of the increase in global wood consumption and the continued widespread reliance on woodfuel.
“The management of forests has improved dramatically over the last 25 years. This includes planning, knowledge sharing, legislation, policies – a whole range of important steps that countries have implemented or are implementing,” said Kenneth MacDicken, leader of FAO’s Global Forest Resources Assessment Team.
He underscored how since 1990 the designation of additional forest land for conservation increased by some 150 million ha and that forest in protected areas has increased by over 200 million hectares.
Safeguarding biodiversity
Forests are rich in biological diversity, and home to more than half of the terrestrial species of animals, plants and insects. FAO warns that despite conservation efforts the threat of biodiversity loss persists and is likely to continue with deforestation, forest degradation – a reduction in tree biomass density from human or natural causes such as logging, fire, windthrows and other events – pollution and climate change all having negative impacts.
Currently, forest area primarily designated for biodiversity conservation accounts for 13 percent of the world’s forest, or 524 million hectares, with the largest areas reported in Brazil and the United States.
Over the last five year period Africa reported the highest annual increase in the area of forest for conservation while Europe, North and Central American and North America reported the lowest compared to previous reporting periods, while the increase reported by Asia for 2010-2015 was lower than that reported for 2000-1010 but higher than the increase reported in the 1990s.
Addressing climate change
Deforestation and forest degradation increase the concentration of greenhouse gases in the atmosphere, but forest and tree growth absorbs carbon dioxide which is the main greenhouse gas. FAO notes how a more sustainable management of forests will result in a reduction in carbon emissions from forests and has a vital role to play in addressing the impacts of climate change.
FAO has estimated that total carbon emissions from forests decreased by more than 25 percent between 2001 and 2015, mainly due to a slowdown in global deforestation rates.
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tralac’s Daily News selection: 7 September 2015
The selection: Monday, 7 September
On Wednesday, in Berlin: Africa Forum 2015 - 'Africa Beyond 2015' (OECD)
Organised by the OECD Development Centre and the German Federal Ministry for Economic Cooperation and Development, in collaboration with German Federal Foreign Office and in partnership with the African Union Commission, the 2015 edition will focus on Africa’s development agenda beyond 2015. It will do so in light of the debates on Sustainable Development Goals and Financing for Development, the impact of the continent’s future demographic development on its economic transformation, and the policy responses to climate change. [Concept notes, Background documents]
G20 Finance Ministers and Central Bank Governors: communiqué
We reiterate our commitment to move toward more market-determined exchange rate systems and exchange rate flexibility to reflect underlying fundamentals, and avoid persistent exchange rate misalignments. We will refrain from competitive devaluations, and resist all forms of protectionism. We will implement fiscal policies flexibly to take into account near-term economic conditions, so as to support growth and job creation, while putting debt as a share of GDP on a sustainable path. To this end, we will also continue to consider the composition of our budget expenditures and revenues to support productivity, inclusiveness and growth. We will carefully calibrate and clearly communicate our actions, especially against the backdrop of major monetary and other policy decisions, to minimize negative spillovers, mitigate uncertainty and promote transparency. [Download]
G20 Labour and Employment Ministers: Ankara Declaration (This declaration also provides links to various annexures: G20 Policy Priorities on Labour Income Share and Inequalities, Skills Strategy, Policy Principles for Promoting Better Youth Employment Outcomes, Framework on Promoting Quality Jobs, Principles for Effective Public Employment Services, Principles on Silver Economy and Active Ageing)
B20 Trade Taskforce Policy Paper (B20)
Expansion of the GVCs will potentially be one of the main drivers for the recovery of global trade growth. To enable GVCs, products need to cross borders multiple times; red tape in customs represents significant friction against such flows.
B20 recommendations to the G20: a summary (Other policy papers - on financing growth, infrastructure and investment, employment, anti-corruption, SMEs and entrepreneurship - prepared for last week's B20 conference can be downloaded here)
Turkey vow to serve as 'Africa's voice' at G20 (NBE)
The number of Turkish embassies in Africa, which was 12 in 2009, has reached 39 with trade volume of $23 billion between the two sides, according to the Ambassador. "Currently Turkish companies have invested $7bn in Africa of which $3bn is in Ethiopia. By doing so we are contributing in job creation and knowledge transfer to Africa. We have also provided 13,000 scholarships for Africans so far. Every year we are giving 1,000 scholarships for Africans," he said.
Luanda Declaration: official English version is now available
We [the African Governors of the IMF and the WBG] suggested few actions that the BWIs could undertake in support of our countries to achieve economic and export diversification by spurring innovation and technologies in higher-value sectors - including agriculture, infrastructure, energy, manufacturing, services, data improvement, and capacity building - to unleash the spirit of entrepreneurship and drive Africa’s transformation. We proposed for Bank's support six regional transformative projects in energy and agriculture sectors; as well as a few innovative solutions to reduce Africa's growing infrastructure financing gap.
African Mining Vision: grooming home grown legal experts for the mining sector (AU)
Under the African Mining Legislation Atlas project, the World Bank Group and its formal partners the African Legal Support Facility and the University of Cape Town gathered African law students from around the continent for a 10 day training on the legal aspects of Africa’s mining sector. This year’s training also included the active attendance and participation of the African Union Commission (AUC), which presented the demands (needs) of the Africa Mining Vision and its implementation for home grown, well researched and tested solutions to the diverse challenges faced by African Union member States. By the end of the parallel sessions, the professors had agreed as a group to begin developing a series of short courses on the legal aspects of the mining sector in the first half of 2016. This consensus is the first piece in laying the foundation for the handover of the AMLA platform to an African institution.
Gerhard Erasmus: 'What is the Continental FTA mandate?' (tralac)
The negotiations to establish the CFTA will start by the middle of 2016. The indicative date for completing the first phase is the end of 2017. These negotiations will be about traditional matters as well as new approaches and challenges. It is important that the African Union and national officials responsible for the preparatory work grasp the essence of those novel aspects inherent in the CFTA initiative; which could make this arrangement a harbinger of true change. To replicate, once again, the old and trusted trade in goods agenda would be to miss a promising opportunity. The CFTA negotiations call for a bolder vision; it has the mandate to do so. The CFTA negotiations shall cover trade in goods, trade in services, investment, intellectual property rights and competition policy, and shall be conducted in two phases. The first phase shall cover trade in goods and trade in services; for which there shall be two separate legal instruments. The second phase has to produce agreements on the remaining areas. [Download]
This Trade Brief argues that the private sector has a vital stake in the effective and lawful implementation of regional trade agreements such as the SADC Protocol on Trade. It sets out to explain why this is so and what the consequences of non-implementation are. There is a need for more concerted action on their part to advance efforts for proper rules-based trade arrangements, for the concomitant benefits of due process, transparency and respect for the rule of law. Some ideas are offered on how this could be achieved.
Peg Murray-Evans: 'Regionalism and African agency: negotiating an Economic Partnership Agreement between the European Union and SADC-Minus' (Third World Quarterly)
EAC pushes for long-term trade pact with the US to replace AGOA (The East African)
The East African Community is pushing for a long-term preferential trade agreement with the United States that will remove uncertainties surrounding the Africa Growth and Opportunity Act. The five member states have submitted their request to the United States Trade Representative (USTR) on the modalities and the time to start negotiations on the pact. According to EAC Director General of Customs and Trade Peter Kiguta, the USTR is expected to present the request at the next US Congress meeting. If accepted, the region expects to increase the volume of trade and the number of products exported to the US. “For EAC partner states to expand their trade partnership with the US market, there has to be a reciprocal free trade agreement like the one with the European Union,” said Mr Kiguta.
35 of 54 heads of state to attend India-Africa summit (Times of India)
The summit will address major global issues like climate change, UNSC reforms and international terrorism. It will also focus on health issue and skill development keeping in mind the young population and ocean related economy of both India and Africa. MEA has gone into an overdrive to ensure the success of the summit at a time when China is looking to further upgrade its partnership with Africa.
Sino-African partnership must come to a new balance based on more sustainable mutual growth (South China Morning Post)
However, a new balance in the African-Chinese partnership model must be found soon, because the devaluation of the renminbi against a stronger US dollar may seriously hinder our continent's exporters and domestic suppliers. The continued weakening of the Chinese currency increases the current account and fiscal imbalances that have already been affected by the recent reduction in the prices of crude oil and other hard commodities.
Unless the African states commit to devaluing domestic currencies, our consumers will be enticed by cheaper Chinese exports, which may hinder domestic entrepreneurship, innovation and growth in our homelands...Thus, instead of promoting the senseless purchase of cheap Chinese consumption goods, the new chapter of the African-Chinese partnership model will focus on the acquisition of capital goods from China. [The author, José Filomeno dos Santos, is chairman of the board of directors at FSDEA, Angola's sovereign wealth fund]
$100bn BRICS monetary fund now operational (The BRICS Post)
The $100 billion BRICS Contingent Reserve Arrangement (CRA) has become fully operational following the inaugural meetings of the BRICS CRA Board of Governors and the Standing Committee in the Turkish capital of Ankara. “The first meetings of the governing bodies mark the start of a full-scale operation of the BRICS Contingent Reserve Arrangement as an international institution with activities set to enhance and strengthen cooperation,” said a Russian Central Bank statement on Friday.
China ratifies Trade Facilitation Agreement (WTO)
EAC energy security policy in the pipeline (The New Times)
This was disclosed in Kigali at the opening of a three-day regional conference on energy, which brought together participants from the five Partner States, UN representatives and other stakeholders. The meeting was convened to discuss how a common EAC energy policy can help Burundi, Kenya, Tanzania, Uganda and Rwanda better manage energy shortages. The policy framework, expected to come into force early next year, would entail a number of energy products, allow for the importation of affordable petroleum products and help the regional countries scale up their respective industrial ambitions.
EAC now backs Uganda on trade disputes with Kenya, Dar (The East African)
Irregular policies hurting Kenya, South Africa trade, says CS (Daily Nation)
The challenge of stability and security in West Africa (World Bank)
The study comes at a critical time for West Africa. In recent decades, the sub region has moved ahead making strides in democratic consolidation, economic growth, and regional cooperation, boasting some of the most stable countries in Africa. But future progress could be undermined unless development policies take a strong role in fostering stability. According to the study, while large-scale conflicts and wars have receded in West Africa, a new generation of threats has emerged over the past few years, including drug trafficking, maritime piracy and extremism – suggesting that the nature of violence is changing. [Download]
Security key to regional prosperity – Museveni (New Vision)
Kenya: Export-import gap up by Sh115bn (Business Daily)
According to newly released Treasury data, the gap — also called the current account deficit — increased by 22.7 per cent to Sh623.2 billion (or $5.99 billion). This amounted to an actual expansion of the deficit by Sh115.4 billion (or $1.11 billion). The deficit has eroded the value of the shilling, which has fallen a notch lower every month this year, meaning it is 13.5 per cent weaker compared to the beginning of the year. This happened as the current account deficit progressively deteriorated. [Download the May Economic Review]
Nigeria: Decline in food, tobacco sub-sectors takes toll on manufacturing sector (ThisDay)
Ghana: Letter of intent, memorandum of economic and financial policies (IMF)
DRC: World Bank supports national statistical system (World Bank)
UK funds project on implementation of the WTO's Trade Facilitation Agreement (WTO)
African Ministers of Communication, ICT: update (AU)
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EAC pushes for long-term trade pact with the US to replace Agoa
The East African Community is pushing for a long-term preferential trade agreement with the United States that will remove uncertainties surrounding the Africa Growth and Opportunity Act (Agoa).
The five member states have submitted their request to the United States Trade Representative (USTR) on the modalities and the time to start negotiations on the pact.
According to EAC Director General of Customs and Trade Peter Kiguta, the USTR is expected to present the request at the next US Congress meeting. If accepted, the region expects to increase the volume of trade and the number of products exported to the US.
“For EAC partner states to expand their trade partnership with the US market, there has to be a reciprocal free trade agreement like the one with the European Union,” said Mr Kiguta.
“The challenge with Agoa is that it is unilateral; it can be withdrawn any time and the 10-year period is very short and limiting for trade. So we need to have a long-term trade partnership that is more predictable,” he added.
Peter Njoroge, the director of economics at Kenya’s Ministry of EAC Affairs, Commerce and Tourism, said that the East African countries have not been able to fully utilise the US quota-free market under Agoa because the agreement does not comply with the World Trade Organisation’s framework for free trade agreements because of its 10-year period of operations.
With a preferential trade partnership like the EAC-EU Economic Partnership Agreement (EPA), Mr Kiguta said member states will be protected from undue competition, and that producers of the most sensitive goods – mainly agricultural goods – will enjoy protection from competition with US imports.
“Under the trade partnership, services and foreign investment will be included not only for trade in goods, but also for issues relating to development,” he added.
The Agoa pact has been renewed for a further 10 years starting this October. The current agreement expires at the end of September.
It accords preferential market access system to 39 countries in sub Saharan Africa, including all the East African countries.
At the recent Agoa ministerial meeting in Gabon, the US urged partner states to formulate their national trade strategies. It was agreed that the USTR will report to Congress on the trade status between Africa and the US every year.
EAC member states are already working on a joint strategy to consolidate their products to export as a bloc to the US.
According to James Kiiru, an external trade officer at Kenya’s Ministry of Foreign Affairs, partner states will give up their current national Agoa strategies and change to the regional one.
“The aim of the joint strategy is to take advantage of economies of scale to supply the US market,” said Mr Kiiru. “It will reduce the cost of exporting to the US, especially in transport, and save time for exporters.”
In July, the US Department of State said it was reviewing Burundi’s eligibility for the trade preferences available to it under Agoa.
“We will be taking into consideration ongoing violence and instability and the government of Burundi’s lack of respect for the rule of law in determining their eligibility for these trade preferences moving forward,” the US State Department said.
Trade between the EAC countries and the US was $2.8 billion in 2014: US exports to the EAC were $2 billion, and imports from the region, which rose by 52 per cent from 2013, were $743 million.
According to Victoria Crandall, a soft commodities analyst at Ecobank Capital, Agoa exports are being slowed down by high production costs.
“Kenya, for example, is unlikely to meet its target of $1 billion by the end of 2017 in earnings from textile exports,” she said.
Kenya produces 25,000 181-kg cotton bales per year, requiring imports to meet demand of 200,000 bales.
“The country would require a sweeping, holistic approach to develop cotton production from scratch. Consequently, Kenyan textile manufacturers will need to import cotton fibre from South Asia, pushing up production costs,” said Ms Crandall.
She added that, despite its advantages, Kenya is facing stiff competition from Ethiopia, which is attracting more investors owing to its lower costs of power and labour.
Currently, more than $385 million’s worth of apparel including jeans and towels exported to the US is manufactured in Kenya’s export processing zones.
Agriculture
The main agricultural exports to the US are cocoa paste and powder, citrus fruits, edible nuts, wine, unmanufactured tobacco, horticultural products and vegetables.
Under Agoa, the US retains various trade barriers and high tariffs on goods such as sugar and cotton.
Sugar, meat, dairy, vegetables, processed fruit and other processed goods such as dried garlic, apricots, shea butter, yoghurt, ghee, cashew nuts, sugarcane products, sugar-containing cocoa products, oil seeds, shrimp and prawns, bananas and mangoes face trade barriers to US markets.
“The priority in the negotiations for a preferential trade agreement will be on the stringent measures imposed by the US on agriculture exports, especially the sanitary and phytosanitary measures that raise the cost of exports to negate competitiveness gained through lower tariffs,” said Mr Kiguta.
The US has imposed stringent SPS measures for agricultural products such as fresh produce and beef, and the majority of East African producers are often unable to meet the high standards.
This has made it difficult for the East African countries to lobby for even more products to be added to the Agoa list, since approval takes a long time.
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35 of 54 heads of state to attend India-Africa summit
India’s Africa outreach in the form of the 3rd India-Africa Forum Summit has taken off with heads of state and government of 35 nations confirming their participation in the summit to be held next month here.
The summit, believed to be Narendra Modi government’s most significant diplomatic engagement at home this year, will see the largest gathering of leaders at that level ever in the country, surpassing the 1983 CHOGM summit which was attended by 33 leaders.
India sees the summit as a springboard to a more intense and strategic engagement with Africa, the resource rich continent where it is playing catch up with China. India has invited all 54 countries in Africa for the summit which will be held from October 26 to 30.
Among those who have agreed to attend are South African President Jacob Zuma and his Nigerian counterpart Muhammadu Buhari. Egyptian President Abdel-Fattah al-Sisi is likely to send a representative for the event.
The summit will address major global issues like climate change, UNSC reforms and international terrorism. It will also focus on health issue and skill development keeping in mind the young population and ocean related economy of both India and Africa.
The previous two editions of the same summit had seen participation by not more than 15 African leaders. The 3rd edition was to be held last year but had to be postponed because of the outbreak of Ebola virus.
MEA has gone into an overdrive to ensure the success of the summit at a time when China is looking to further upgrade its partnership with Africa. According to a Xinhua report Friday, China and South Africa announced Friday morning in Beijing that the sixth ministerial meeting of Forum on China-Africa Cooperation will be upgraded to a summit, scheduled on December 4-5 in South Africa. This was during the South African president’s visit to China which ended the same day.
According to MEA, the India-Africa Forum Summit mechanism was put into place to give a framework to India’s engagement with Africa “in the present century – the functional, the economical, and the political engagement with the entire continent as a whole”. The first India-Africa Forum Summit was held in 2008 in India. The second one was held in 2011 in Addis Ababa.
Apart from making available $7 billion as soft loan to Africa, as lines of credit, India has recently focused on capacity building as a major area of its partnership with Africa. These include building vocational training centres in countries like Ethiopia, Burundi and Rwanda.
While the overall annual trade volume is still not satisfactory, it has shown a steady increase in the past 10 years with the figure now having reached $70 billion. In contrast though, China overtook the US as Africa’s largest trading partner in 2009 and last year its trade figure with the continent stood at over $ 200 billion.
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$100bn BRICS monetary fund now operational
The $100 billion BRICS Contingent Reserve Arrangement (CRA) has become fully operational following the inaugural meetings of the BRICS CRA Board of Governors and the Standing Committee in the Turkish capital of Ankara.
“The first meetings of the governing bodies mark the start of a full-scale operation of the BRICS Contingent Reserve Arrangement as an international institution with activities set to enhance and strengthen cooperation,” said a Russian Central Bank statement on Friday.
BRICS leaders Xi Jinping, Vladimir Putin, Jacob Zuma, Narendra Modi and Dilma Rousseff witnessed the signing of the agreement on the CRA in the Brazilian city of Fortaleza in July 2014.
The agreement entered into force on July 30, 2015.
China will provide the bulk of the funding with $41 billion, Brazil, Russia and India with $18 billion each, and South Africa with $5 billion.
The CRA is meant to provide an alternative to International Monetary Fund’s emergency lending. In the CRA, emergency loans of up to 30 per cent of a member nation’s contribution will be decided by a simple majority. Bigger loans will require the consent of all CRA members.
Meanwhile, Finance Ministers from the five BRICS countries have met in Ankara on the sidelines of the G20 meeting of global finance ministers and central bankers, amid growing worries about the state of the global economy.
With a looming US federal Reserve rate hike and Chinese market turbulence sending shock waves through emerging markets, the IMF has lowered its global growth forecast.
A G20 communiqué after their two-day meeting in the Turkish capital Ankara noted that global growth was falling short of expectations.
“Global growth falls short of our expectations. We have pledged to take decisive action to keep the economic recovery on track and we are confident the global economic recovery will gain speed,” the statement said.
The G20 vowed to “carefully calibrate and clearly communicate our actions … to minimise negative spillovers, mitigate uncertainty and promote transparency”.
As the BRICS countries launched new financial institutions like the $100 billion BRICS Bank, the China-led Asia Infrastructure Investment Bank, and a $100 billion BRICS currency reserve fund, the IMF has once again delayed voting reforms to give emerging countries greater say.
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Third G20 Finance Ministers and Central Bank Governors Meeting under the Turkish Presidency concluded in Ankara
G20 Finance Ministers and Central Bank Governors convened for the third time under the Turkish Presidency in Ankara on 4-5 September 2015.
The meeting was attended by the Finance Ministers and Central Bank Governors of the G20 members, invited countries, and the heads and senior representatives of the relevant international organizations.
This meeting provided an important and timely opportunity to make a comprehensive evaluation of the progress on the agenda and Finance Track deliverables to be submitted to G20 Leaders at the Antalya Summit, and discuss actions required to achieve G20’s ambitions for this year.
G20 Ministers and Governors exchanged views on the recent global economic developments, challenges and collective measures to address them. They also reviewed the progress in monitoring and adjustment of G20 growth strategies and evaluated the way forward for G20 investment strategies. Ministers and Governors continued their meeting with the international financial architecture issues, financial regulation, international tax agenda and climate finance.
On the margins of this gathering, G20 Ministers and Governors had the opportunity to hear B20 representatives’ perspectives on the 2015 B20 agenda and B20 recommendations to the G20 during a working dinner.
Upon the conclusion of the meeting, the agreed communiqué of the meeting was released.
G20 Finance Ministers and Central Bank Governors Meeting: Communiqué
4-5 September 2015, Ankara, Turkey
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We met in Ankara to review ongoing economic developments, our respective growth prospects, and recent volatility in financial markets and its underlying economic conditions. We welcome the strengthening economic activity in some economies, but global growth falls short of our expectations. We have pledged to take decisive action to keep the economic recovery on track and we are confident the global economic recovery will gain speed. We will continue to monitor developments, assess spillovers and address emerging risks as needed to foster confidence and financial stability.
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We reaffirm the role of macroeconomic and structural policies to support our efforts to achieve strong, sustainable and balanced growth. Monetary policies will continue to support economic activity consistent with central banks’ mandates, but monetary policy alone cannot lead to balanced growth. We note that in line with the improving economic outlook, monetary policy tightening is more likely in some advanced economies. We reiterate our commitment to move toward more market-determined exchange rate systems and exchange rate flexibility to reflect underlying fundamentals, and avoid persistent exchange rate misalignments. We will refrain from competitive devaluations, and resist all forms of protectionism. We will implement fiscal policies flexibly to take into account near-term economic conditions, so as to support growth and job creation, while putting debt as a share of GDP on a sustainable path. To this end, we will also continue to consider the composition of our budget expenditures and revenues to support productivity, inclusiveness and growth.
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We will carefully calibrate and clearly communicate our actions, especially against the backdrop of major monetary and other policy decisions, to minimize negative spillovers, mitigate uncertainty and promote transparency.
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The need to boost actual and potential output growth is a key challenge for the global economy. We remain committed to timely and effective implementation of our growth strategies that include measures to support demand and lift potential growth. As we implement these strategies, we will take steps to promote greater inclusiveness, including to reduce income inequality. This year we developed a robust framework to monitor the implementation of these measures and prepared detailed implementation schedules. Based on this, we will present our first accountability report on progress against our growth strategy commitments at the Antalya Summit. Preliminary analysis by the international organizations shows that we are making progress towards our commitments and that more effort is needed for implementation. We are also reviewing our growth strategies, including through peer review, to make sure that they remain consistent with our collective growth ambition.
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Boosting investment is a top priority for us. To this end, we have prepared country-specific investment strategies that present concrete actions in order to improve the investment ecosystem, foster efficient infrastructure investment and support financing opportunities for SMEs. We welcome the progress note by the OECD that provides a preliminary review of our investment strategies and contributes to knowledge sharing. We look forward to further qualitative and quantitative assessments of our strategies and based on these assessments, we will finalize them for the Antalya Summit. We also welcome the recommendations and assessment frameworks developed by the IMF, WBG, and OECD to help countries strengthen their public investment management processes and enhance the quality of investment. We also reiterate the importance of mobilizing multilateral and national development bank resources and technical expertise. In this respect, we welcome the progress in the Multilateral Development Banks’ (MDBs) action plan for balance sheet optimization.
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In order to encourage private sector engagement, we acknowledge the consolidation of best practices in public private partnership (PPP) models, which can address commonly-encountered challenges. We welcome the WBG PPP Guidelines and the OECD/WBG PPP Project Checklist which provide guidance on international best practices for preparation and implementation of PPPs. Moreover, we also endorse the business plan of the Global Infrastructure Hub, which will address data gaps, lower barriers to investment and move engagement with the private sector beyond business as usual. We look forward to regular updates on its operations.
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In recognition of major financing needs for long term investments, we also focused on examining possible alternative capital market instruments. As such, we take note of the policy recommendations by the IMF and WBG on systematically integrating the features of asset-based financing practices into global finance. To help ensure a strong corporate and public governance framework that will promote private investment, we also endorse the G20/OECD Principles on Corporate Governance. We recognize the potential to facilitate financial intermediation for SMEs including by improving systems for credit reporting, lending against movable collateral, and insolvency reforms. We welcome the progress on the G20/OECD High Level Principles on SME financing and the establishment of the private sector-led World SME Forum, a new initiative to serve as a global body to drive the contributions of SMEs to growth and employment.
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We remain deeply disappointed with the continued delay in progressing the 2010 IMF Quota and Governance Reforms. We reaffirm that their earliest implementation is essential for the credibility, legitimacy and effectiveness of the Fund and remains our highest priority. We strongly urge the United States to ratify the 2010 reforms as soon as possible. We reaffirm our commitment to maintaining a strong, well-resourced and quota-based IMF. In reference to our call in Istanbul, we look forward to progress on the SDR Basket Review in November. We welcome the progress achieved on the implementation of strengthened collective action and pari passu clauses in international sovereign bond contracts, and stress the importance of accelerating their implementation. Regarding debt sustainability, we acknowledge the existing initiatives aimed at improving sustainable financing practices, as stressed in the Addis Ababa Action Agenda. We also take note of the Paris Forum initiative, which contributes to further the inclusiveness by fostering dialogue between sovereign debtors and creditors.
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We reaffirm our resolve to finalize the remaining core elements of the global financial reform agenda this year. We welcome the work by the FSB, BIS and BCBS on rigorous and comprehensive quantitative impact assessments on a total-loss-absorbing-capacity standard (TLAC) for global systemically important banks and by the BCBS and IOSCO on criteria for identifying simple, transparent and comparable securitizations. We look forward to the finalization of the common international standard on the TLAC for global systemically important banks and robust higher loss absorbency requirements for global systemically important insurers by the Antalya Summit, and completion of the previously agreed work on the extension of the contractual recognition of temporary stays on early termination rights for OTC derivatives contracts to include other instruments and firms, excessive variability in risk-weighted asset calculations for bank capital ratios and implementation of the G20 shadow banking roadmap. We also look forward to progress this year on the agreed work plans regarding central counterparties’ resilience, recovery planning and resolvability, misconduct risk and withdrawal from correspondent banking and remittances services. We will work to address legal barriers to the reporting of OTC derivatives contracts to trade repositories and to the cross-border access of authorities to trade repository data, as well as to improve the usability of that data. We continue to closely monitor financial stability challenges, including those associated with asset management activities and will ensure that related risks are fully addressed. We look forward to the FSB’s first annual report on the implementation and the effects of all reforms, including any material unintended consequences, particularly for EMDEs. We recognize potential risks to financial stability arising from liability structure distortions in corporate balance sheets and ask the FSB, in coordination with other international organizations, to continue to explore any systemic risks and consider policy options.
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The fight against terrorism is a major priority for all of our countries and thus, we reiterate our resolve to tackle its financing channels. We reaffirm our commitment to deepen our cooperation concerning the exchange of information and freezing of terrorist assets, in particular to facilitate cross-border freezing requests, and we will work on modalities to promote further transparency of financial flows. Criminalization of terrorist financing and the existence of robust targeted financial sanctions regimes related to terrorism and terrorist financing are fundamental requirements to actively curb terrorist financial flows.
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In line with our commitments to reach to a globally fair and modern international tax system, we are in the final phase of delivering the G20/OECD Base Erosion and Profit Shifting (BEPS) Action Plan. The final package of all 15 action items is expected by October, and at our next meeting in Lima, we will review this package to submit it to our Leaders in Antalya. The effectiveness of the project will be determined by its widespread and consistent implementation. We will continue to work on an equal footing as we monitor the implementation of the BEPS project outcomes at the global level, in particular, the exchange of information on cross-border tax rulings. We call on the OECD to prepare a framework by early 2016 with the involvement of interested non-G20 countries and jurisdictions, particularly developing economies, on an equal footing. We welcome the efforts by the IMF, WBG, UN and OECD to provide appropriate technical assistance to interested developing economies in tackling the domestic resource mobilization challenges they face, including from BEPS. We continue to work to enhance the transparency of our tax systems, and reaffirm our previously agreed timelines for the implementation of automatic exchange of information. We reiterate our commitment to implement the G20 High-Level Principles on Beneficial Ownership Transparency and look forward to further progress on country implementation. We support the efforts made for strengthening non-G20 economies’ engagement in the international tax area and welcome the decisions taken under the Addis Ababa Action Agenda on international cooperation on tax matters.
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We reaffirm our commitment to promote an enabling global economic environment for developing countries as they pursue their sustainable development agendas, including by strengthening our policy dialogue. We welcome the positive outcomes of the Addis Ababa Conference on Financing for Development (FFD) and in support of them, we aim to scale up our technical assistance efforts to help developing countries build necessary institutional capacity, particularly in the areas specified in the Addis Ababa Action Agenda. We also look forward to a successful outcome of the UN Summit in New York for the adoption of the 2030 Agenda for Sustainable Development.
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To support the climate change agenda of 2015, we welcome the Climate Finance Study Group (CFSG) report, take note of the inventory on climate funds developed by the OECD, and the toolkit developed by the OECD and the GEF to enhance access to adaptation finance by the low income and developing countries, especially those that are particularly vulnerable to the adverse effects of climate change. We recognize developed countries’ ongoing efforts and call on them to continue to scale up climate finance in line with their commitments. We are working together to reach a positive and balanced outcome at the 21st Conference of Parties of the UNFCCC (COP 21). Based on the outcomes and towards the objectives of the COP21, CFSG will continue its work in 2016 by following the principles, provisions and objectives of the UNFCCC.
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B20 Policy Proposals for the G20
Responding to the three I’s
Inclusiveness, Implementation, Investment
In November 2014, the G20 agreed that raising global growth to deliver better living standards and quality jobs was the highest priority.
Over the past 12 months, the G20 has focused on promoting sustainable development and implementing actions agreed in Brisbane designed to increase G20 GDP by at least 2 percent by 2018 – particularly the individual country growth strategies contained in the Brisbane Action Plan. Despite these efforts, the recovery of economic growth globally remains weak; unemployment, particularly among youth, and labor-force participation by women have not materially improved, nor have small and medium-sized enterprises (SMEs) found firmer foundations. Globally, trade and investment are still at pre-crisis levels, while increasing technological disruption and falling productivity are also impacting private-sector activity, growth, and employment.
This year, the G20’s focus is on ensuring inclusive and robust growth through collective action in accordance with the “three I’s” – Implementation, Inclusiveness, and Investment for growth.
In response, the B20 has organized itself around six taskforces: five of them – Trade, Infrastructure and Investment, Financing Growth, Employment, and Anti-Corruption – built on the work of the previous cycles’ taskforces, and given the G20’s priority of implementation, focused on advocacy and refinement of the existing set of B20 recommendations. Given the G20’s inclusiveness priority, a new taskforce on SMEs and Entrepreneurship developed recommen-dations to better integrate SMEs into the global economy. The B20 taskforces identified a number of critical barriers to growth and employment across the “three I’s” where G20 intervention is required to promote and strengthen economic activity and create jobs, and developed actionable and policy-relevant recommendations.
Summary of B20 recommendations to the G20
The B20 puts forward the following set of policy recommendations to support the G20 leaders in their ongoing mission to implement structural reforms and to ensure strong, sustainable, and balanced growth. The B20 encourages the G20 leaders to cooperate effectively for sound macroeconomic policies and implement their respective growth and investment strategies. In particular, the B20 believes that by addressing the following recommendations, the G20 will remove obstacles to increased private-sector activity. The B20 asks the G20 leaders to address these recommendations and to advance them through corresponding policy mandates in their Antalya Summit communiqué:
To complete implementation of agreed policies, G20 members should: 1. Ratify and implement the Trade Facilitation Agreement. 2. Finalize and improve the implementation of the global financial reform agenda. 3. Reiterate the need for regulatory consistency and improve the consultation process in the financial reform agenda. 4. Implement the G20 High-Level Principles on Beneficial Ownership Transparency. |
To invest in correcting imbalances, G20 members should: 5. Develop a common set of international investment principles and promote greater transparency and harmony in taxation related to FDI. 6. Develop country-specific infrastructure investment strategies linked to G20 growth aspirations. 7. Improve the infrastructure investment ecosystem to facilitate the development of infrastructure as an asset class. 8. Develop and finance programs aimed at reducing skills mismatches, in particular technical, managerial, and entrepreneurial skills. |
To foster inclusiveness, G20 members should: 9. Implement comprehensive structural reforms, making labor markets more dynamic and inclusive, to advance employment opportunities. 10. Increase youth employment and female labor-force participation. 11. Make data on SME creditworthiness more transparent and available so that various finance tools that reduce risk associated with SME lending can be used effectively. 12. Broaden and deepen SMEs’ access to alternative financing by supporting and harmonizing policies, regulations, and standards. 13. Provide support to SMEs to comply with international standards and improve their access to international markets through capacity-building and technical assistance programs. 14. Incorporate a five-year universal broadband connection target into G20 Member Growth Strategies, improve SMEs’ access to the digital economy, and innovation ecosystems by increasing stakeholder collaboration. |
To enhance competition, G20 members should: 15. Improve the global trade system for the emerging digital economy. 16. Initiate G20-wide entrepreneur visa programs. 17. Reaffirm their commitment to a standstill on protectionism and roll back existing protectionist measures, especially non-tariff barriers, including localization barriers to trade. 18. Develop and adopt a comprehensive digital environment for customs procedures and cross-border automated clearance systems in all G20 countries within five years through public-private collaboration. 19. Digitalize public procurement systems, develop high-level reporting mechanisms, and incentivize business compliance programs for public procurement processes. |
Institutional support and leadership of policy responses is critical to timely and efficient implementation. In responding to these recommendations, G20 members should benefit from and utilize the World SME Forum and the Global Infrastructure Hub, as well as a proposed Global Skills Accelerator, alongside existing organizations, to develop policy and business solutions and facilitate implementation of the associated B20 recommendations.
Fully realizing the potential of digital technologies will be an important component of implementation across all recommendations given their impact on productivity, costs, reach, and transparency. This paper outlines the measures in different policy areas to be implemented by the G20 to increase the adoption of digital technologies both by business and governments.
While supporting implementation of the B20 recommendations, the G20 should acknowledge the importance of improved transparency, principled business practices, and good governance. These are the keys to building trust and achieving inclusive and sustainable development, synergistic with the environmental, social, and governance goals of the post-2015 development agenda.
The B20 recommendations will not have their expected impact on growth and job creation without a sound global macroeconomic environment. In this regard, the B20 reiterates the key role of the G20 in boosting confidence and reducing vulnerabilities through effective cooperation on implementation of macroeconomic policies. The G20’s macroeconomic policy coordination will become more effective with regular and sustained consultations with the B20 during the mutual assessment process, at global standard-setting bodies such as the Financial Stability Board, and in the relevant G20 working groups.
The business community believes that, by implementing the B20 recommendations, the G20 will boost confidence in line with its objectives to strengthen the global recovery and lift potential, enhance resilience, and buttress sustainability. At the same time, the private sector, including SMEs, will be encouraged to invest and trade more, thereby creating more jobs. The global business community commits to working with the G20 in implementation of these recommendations and enhancing the public-private dialogue.
B20 Trade Taskforce Policy Paper
Executive summary
Trade growth has been sluggish in recent years, slowing to 3.5 percent in 2013 – half of what it was in 2011 and slightly below current global GDP growth. This growth rate is well below the pre-crisis average of 7 percent (1987-2007) when trade grew at twice the rate of GDP. The International Monetary Fund (IMF) and World Bank estimate that trade growth may decline to 2 percent if current conditions persist. Slower expansion of global value chains (GVCs), rising protectionism, and the decline in trade-intensive investment components of GDP are some of the main structural drivers. To spur growth to pre-crisis levels, the G20 should ratify and implement the WTO’s Trade Facilitation Agreement, reaffirm the standstill commitment and roll back existing measures (especially non-tariff barriers to trade, starting with forced localization barriers), and improve the global trade system for the emerging digital economy.
Expansion of the GVCs will potentially be one of the main drivers for the recovery of global trade growth. To enable GVCs, products need to cross borders multiple times; red tape in customs represents significant friction against such flows. The Trade Facilitation Agreement aims to streamline customs procedures between nations and expedite the movement and clearance of goods, removing inefficiencies and “greasing the wheels” of international trade. Implementation of the agreement has been estimated to contribute up to $1 trillion (1 percent) to world GDP, creating 21 million jobs – 18 million of which will be in developing countries. Consequently, this agreement plays a significant role in the G20 target of adding 2 percent to global GDP and it is one of the most targeted and actionable actions that the G20 governments could take.
Although governments reiterated their commitment to the standstill agreement and pledged to roll back protectionist measures, last year non-tariff barriers did not receive the desired attention in the Brisbane communiqué and protectionist measures – particularly forced localization policies, including local content requirements – continued to accumulate during 2015. Therefore, the members of the G20 should reiterate their commitment to the standstill agreement and take specific actions in initiating the rollback of protectionist measures. The B20 identified forced localization barriers to trade as the priority for rollback because of their substantial impact and recent proliferation. The rollback of all protectionist measures introduced between 2008 and 2013 would add $460 billion to global trade, while the rollback of LBTs introduced over the same period would add $93 billion.
Finally, the B20 Trade Taskforce recommends that G20 governments unleash the potential of the digital economy by improving the global trading system. In this regard, the B20 is seeking to attract G20 governments’ attention on some key issues that impede the gains from the emerging digital economy. These include data-flow restrictions, burdensome custom procedures for e-commerce shipments, onerous compliance to legislation for e-traders, and lowering barriers to the trade of information technology goods.
The following actions have been suggested by the taskforce to accomplish the proposed recommendations:
1. Ratify and implement WTO’s Trade Facilitation Agreement:
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Ratify the WTO’s Trade Facilitation Agreement by the 10th WTO Ministerial Conference in Nairobi in December 2015 or commit to the earliest deadline, to fulfill previous commitments and show leadership to other WTO members.
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Establish and strengthen their national trade facilitation committees to systematically support and coordinate implementation of trade facilitation measures. The committees should have balanced representation from the public and private sectors, and should oversee effective TFA implementation and identify solutions to regulatory, administrative, legislative, and cost barriers to cross border trade.
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Commit to high-quality and prioritized high-impact implementation plans in order to ensure substantive impact of the TFA on the real economy. Among immediate steps the G20 can take to accelerate implementation is to adopt the “single window” approach, by expanding pre-arrival processing, and improving the transparency and predictability of the advance-ruling mechanism, and developing digital systems in order to increase electronically executed operation and risk assessment.
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Implement tried and tested UN and World Customs Organization (WCO) tools and guidelines, most notably the WCO Revised Kyoto Convention and UN TIR Convention, to facilitate implementation of TFA.
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Coordinate support to developing and least-developed trade partners and commit as soon as possible to provide the necessary financial resources and capacity building in order to encourage developing countries to ratify the TFA and ensure its ambitious implementation. The G20 should encourage technical assistance be provided by multilateral development banks and other intergovernmental organizations where appropriate.
2. Reaffirm the standstill commitment and roll back existing protectionist measures, especially non-tariff barriers starting with localization barriers to trade (LBTs):
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Reaffirm the standstill commitment and roll back existing protectionist measures especially non-tariff barriers
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Focus on eliminating forced localization barriers to trade through bilateral, plurilateral, and regional agreements to demonstrate a commitment to the rollback of non-tariff barriers. Further elimination of localization barriers to trade should be negotiated through the ongoing development of the Trade in Services Agreement and the Environmental Goods Agreement.
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Initiate negotiations of a plurilateral code on localization barriers to trade through the WTO, since existing WTO agreements are not sufficient to limit these barriers.
3. Improve the global trade system for the emerging digital economy:
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Improve access to IT products by accelerating finalization of the ITA II agreement.
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Discuss measures that go beyond the TFA to facilitate customs procedures with a direct focus on e-commerce transactions.
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Establish one-contact information centers to support SMEs around legislative issues concerning cross-border e-commerce.
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Roll back data flow restrictions and improve cyber-security.
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Irregular policies hurting Kenya, South Africa trade, says CS
Kenya says it is still discussing with South Africa for an urgent solution to address irregular policies which government officials admit are hurting trade between the two countries.
On Friday, Foreign Affairs CS Amina Mohamed told an audience in Johannesburg that a uniform set of rules on immigration and trade for the two countries is being discussed which, once agreed, could improve on their commercial links.
It was an admission that despite South Africa lessening some of its visa conditions on Kenyans last month, the rules are still stringent.
“Some have been partially addressed but they remain squarely on the table,” she told a gathering of businesspeople in Sandton Johannesburg, where the Kenyan High Commission in Pretoria is hosting the Kenya Trade and Investment Summit
“Even here much more needs to be done. We must finally agree to a bilateral standard regime applicable to the two countries,” she added, according to a statement from the Ministry.
Ms Mohamed is in South Africa with Acting Transport CS James Macharia and Energy PS Joseph Njoroge.
The two are meeting Kenyan and South African businesspeople in the latest bid to woe investors to Kenya with a slogan that Kenya is now a preferred choice.
Ms Mohamed encouraged South African investors to expand their ventures in Kenya saying that the country has now become a better destination for foreign direct investments, having risen from Sh49.9 billion in 2013 to Sh97.8 billion last year.
But irregular levies on goods, hygienic requirements and tough immigration laws are the impediments. Last month, South Africa agreed to to reduce visa application fees for Kenyans from the usual Sh6800 to Sh4700.
The agreement signed by Immigration Department chief Gordon Kihalangwa and South Africa’s Deputy Director of South African Immigration Services Jackie McKay also tackled transit visa, single entry visa, business, medical and student visas, change of immigration status for Kenyans in South Africa, visa application fees and travel arrangements for government officials.
One of the changes in the agreement was issuance of full-duration visas to students, waiving visa requirements for Kenyans transiting through South Africa to its neighbours.
However, Kenyans will still have to apply for visas the same way, meet all the other financial conditions, apply through a third party firm VFS Global, and wait for a visa within five working days.
Though the agreement talked of further discussions on waiving visa requirements for government officials as well as unconditional multi-entry visas, the issues are expected to be addressed over time.
On Friday, Ms Mohamed said those talks will be sped up as leaders of both countries acknowledge the need for a solution especially on trade barriers.
“I assure our respective business communities that the bilateral Joint Trade Committee (JTC) will continue to address outstanding issues so as to enhance trade between Kenya and South Africa,” said the Cabinet Secretary.
Total trade between Kenya and South Africa increased from US$506 million (Sh50 billion) in 2008 to US$700 million (Sh70 billion) in 2014, according to the Foreign ministry which also handles international trade.
It favours South Africa. Kenyan traders have often complained that their exports to South Africa have faced numerous tariff barriers and levies, which they claim have impeded their goods from accessing the South African market.
Kenya and South Africa signed a Joint Commission and Cooperation in October 2007 to address some of the issues, but solutions have taken long.
COMESA takes initiative to harmonize mineral policies in Member States
COMESA is working with the government of Western Australia to develop a harmonized regional mineral policy focusing on the legal and regulatory framework. This is intended to level the operating environment for mineral resources exploitation.
Secretary General Sindiso Ngwenya says the policy will be guided by the Africa Mining Vision and will lay emphasis on mining for development and socio-economic transformation. Mr Ngwenya was speaking today during the opening of the African Down Under (ADU) mining conference in Perth, Australia.
The ADU is an annual event that brings together African governments led by Ministers in charge of mining, business leaders, investors, consultants, financiers and executives from the mining services industries. The Premier of Western Australia Hon Colin Barnett officially opened the conference.
COMESA States participation follows the signing of a Memorandum of Understanding (MoU) with the Government of Western Australia on collaboration in mineral resources development. The Secretary General said the primary aim of the MoU was to improve the management of natural resources so that they contribute to sustainable socio-economic growth and development and transformation within the region.
“An important aspect of the harmonized environment would be on optimizing the fiscal frameworks through appropriately configured taxation mechanisms,” Mr Ngwenya said. “The experience of Australia in using its resource base as a springboard for socio-economic transformation continues to draw African countries to ADU to seek optimal ways to exploit the continent’s vast mineral resources to underpin development.”
Under the MOU, the COMESA Secretariat is working on profiling mineral beneficiation in the region and on developing policy frameworks to cover the important areas of fiscal frameworks, sustainable mining development, corporate social responsibility, institutional strengthening and human skills development.
COMESA countries are represented by senior government officials including ministers in charge of mining from Ethiopia, Malawi, Sudan, Zambia and Deputy Minister from Zimbabwe.
Mr Ngwenya informed the meeting that the collaboration between Australia and the African continent had seen more Australian mining companies on the African continent and mining trade missions undertaken by companies such as Armour Energy Limited in May 2015 to Zambia, Uganda, Malawi, Kenya and Tanzania.
He added that Australia was a key player in financing minerals exploration and mine development, the world over and thus Africa looked at ADU as an opportunity to showcase geological potential and the prospectivity for certain minerals in its diverse geology.
He informed the meeting that mineral beneficiation and value addition was the cornerstone of the COMESA industrial development strategy as well as for the Tripartite COMESA-EAC-SADC Industrial Development agenda.
Mr Barnett said Australia investment in the mining industry in Africa had soared to over USD$ 30 billion and rising. He said over 120 companies out of 190 that were active in Africa were from state of Western Australia. He said his government was working with COMESA to strengthen the capacity of the Member states to benefit more from their abundant mineral resources.
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Global Prospects and Policy Challenges: IMF Note prepared for the G-20 Finance Ministers and Central Bank Governors Meeting
The following Executive Summary is from a note by the Staff of the IMF prepared for the Third G-20 Finance Ministers and Central Bank Governors Meeting that took place on September 4-5, 2015 in Ankara, Turkey.
Global growth remains moderate, reflecting a further slowdown in emerging economies and a weak recovery in advanced economies. In an environment of rising financial market volatility, declining commodity prices, weaker capital inflows, and depreciating emerging market currencies, downside risks to the outlook have risen, particularly for emerging markets and developing economies.
Global growth in the first half of 2015 was lower than in the second half of 2014, reflecting a further slowdown in emerging economies and a weaker recovery in advanced economies. In advanced economies, weaker exports, partly reflecting temporary factors, and a slowdown in domestic demand were key factors. Productivity growth has been persistently weak. In emerging economies, the slowdown reflects a continuation of the adjustment after the investment and credit boom post-crisis, together with the fallout from declining commodity prices, geopolitical tensions, and conflict in a number of countries. In advanced economies, economic activity is projected to pick up modestly in the 2nd half of the year and into 2016. In emerging economies growth this year is projected to slow again relative to 2014; some rebound is projected next year, as conditions in distressed economies, while remaining difficult, are projected to improve.
Financial conditions for emerging economies have tightened. In an environment of rising financial market volatility, dollar bond spreads and long-term local currency bond yields have increased relative to the spring, stock prices have weakened, and capital inflows have declined. Emerging market currencies have generally depreciated, reflecting weakening commodity prices, concerns about the growth transition in China, an increase in risk aversion, and expectations of a lift-off in policy rates in the United States. In contrast, financial conditions in advanced economies continue to be easy. On the back of weak demand, safe real interest rates remain low, despite some widening of spreads, even as the policy rate lift-off approaches in the United States.
Risks are tilted to the downside, and a simultaneous realization of some of these risks would imply a much weaker outlook. Near-term downside risks for emerging economies have increased, given the combination of China's growth transition, lower commodity prices, potential adverse corporate balance sheet and funding challenges related to a dollar appreciation, and capital flow reversals and disruptive asset price shifts.
Strong mutual policy action is needed to raise growth and mitigate risks:
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Advanced economies should maintain supportive policies. In most advanced economies substantial output gaps and below-target inflation suggest that the monetary stance must stay accommodative. Fiscal policy should remain growth friendly and be anchored in credible medium-term plans. Managing high public debt in a low-growth and low-inflation environment remains a key challenge.
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In many emerging economies, policy space to support growth remains limited. The commodity price declines over the past year have alleviated inflation pressures and mitigated external vulnerabilities in net commodity importers, but increased external and fiscal vulnerabilities in commodity exporters. Oil exporters that have accumulated savings and have fiscal space can let fiscal deficits increase and allow a more gradual adjustment of public spending. For floaters with less policy space, exchange rate flexibility will be a critical buffer to the shock. This may require improving macroeconomic policy frameworks in some countries and keeping balance sheet exposures manageable.
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Decisive structural reforms are needed to raise potential output and productivity across the G-20 members. Labor market reforms in advanced economies undergoing population aging should aim at raising labor participation, and actions to increase labor demand and remove impediments to employment are also needed in euro area economies and some emerging markets. Reforms to improve the functioning of product markets are also needed in Japan and the euro area, and reforms to improve productivity and raise potential output are key in many emerging economies. Joint policy efforts by deficit and surplus economies are needed to reduce excess imbalances while sustaining growth.
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Tanzania conference places open data at center of development agenda
More than 400 representatives from government, academia, private industry, civil society, and international organizations have gathered in Dar es Salaam for a two-day conference to share experiences and best practices to promote the production and utilization of open data in Africa, and increase its potential development impact on the continent.
“Transparency, openness and accountability are critical for both the Government and the people because when the Government is open, the people know what is going on, they can hold their Government accountable, and the Government has the urge to deliver,” noted His Excellency, the President of the United Republic of Tanzania, Dr. Jakaya Mrisho Kikwete.
To mark the official opening of the Africa Open Data Conference, which is jointly organized by the Government of Tanzania and the World Bank, the President of the United Republic of Tanzania will deliver a keynote addressing the importance of open data for development in Africa to participants from over 30 countries.
“Open data” is data provided without charge and with open access to the public, which can be freely used, reused, and redistributed. Tanzania was the first African country to apply the new Open Data Readiness Assessment methodology in June 2013 and since then, other African countries, including Nigeria, South Africa, Uganda, Kenya, Rwanda, Ghana, Burkina Faso, Sierra Leone, Senegal, Morocco, Egypt, Tunisia, and Ethiopia, have also embarked upon their own open data initiatives. In March 2015, several African countries gathered to sign the Africa Data Consensus to uphold the principles of official statistics as well as openness.
Building on this momentum, the Africa Open Data conference provides an opportunity for participants to share their practical experience with open data initiatives across African countries, further develop applications for citizen participation, and improve the monitoring of government activities and service delivery. Experts will also share their strategies for open data as a boost to private sector growth, jobs, and innovation.
To support these efforts, a pre-conference program offered workshops and technical training sessions on a variety of topics, including a data skills crash course and an open data master class.
“In many parts of the world, open government and open data have had a transformative impact on economic growth, job creation, and the way citizens interact with their government, and it is exciting to see the same potential being realized here in Tanzania,”said Bella Bird, the World Bank Country Director. “This gathering represents an excellent opportunity to bring together a community of open data experts to develop innovative approaches to development outcomes on the continent.”
The World Bank, through its Information and Communication Technologies as well as Governance Global Practices, is fully engaged in supporting countries around the world to harness the potential of open data for reducing poverty and boosting prosperity, as well as meeting the new sustainable development goals to be approved by the United Nations in September 2015.
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EAC energy security policy in the pipeline
East African Community (EAC) Partner States are in the process to formulate a comprehensive energy security policy with a view to enable the generation of affordable and reliable supply of electricity and petroleum products.
This was disclosed yesterday in Kigali at the opening of a three-day regional conference on energy, which brought together participants from the five Partner States, UN representatives and other stakeholders.
The meeting was convened to discuss how a common EAC energy policy can help Burundi, Kenya, Tanzania, Uganda and Rwanda better manage energy shortages.
The policy framework, expected to come into force early next year, would entail a number of energy products, allow for the importation of affordable petroleum products and help the regional countries scale up their respective industrial ambitions.
According to Antonio Pedro, the country-director, United Nations Economic Commission for Africa (Uneca), the absence of a common regional policy has made the countries lose out on numerous opportunities.
“There is a need to master future marketing techniques to avoid sudden changes occasioned by different circumstances whether global or regional. Petroleum products were at $100 a barrel, for example previously, but because we did not hedge against any change, we did not benefit significantly in those changes, well before it happened,” he said.
The projected policy is expected to help countries create reserves for at least six months, unlike in the past where many countries in the region were been used to reserves for three months.
This, on the other hand, will help countries stabilise systems to deal with fluctuating prices of oil products, mostly crude oil, officials said.
“The policy will help us hedge against price increases; we need to master techniques for future purposes as part of our security options,” Pedro said.
As overall demand of renewable energy is increasing in the region, he said, adding that it was a timely move to consider an up-to-date common policy that would help propel the five states toward sustainable development.
“There is a need to sequence investments in infrastructure to help Rwanda reduce energy deficit, import electricity, extract methane gas, and to make use of geothermal reserves, solar and/or traditional energy sources,” he added.
The proposed policy is expected to have a regional master plan that will help member countries make better use of projected capacity on energy products.
Rwanda seeks to increase its power capacity to 563 megawatts by 2017 from the current 160 megawatts, and field experts believe that teaming up with regional member states to design a harmonised policy will help it to hit its target.
For example, Rwanda, which plans to start importing power from Kenya early next year, might find the regional policy framework suitable to negotiate more deals with Ethiopia which, in the near future, will be a top electricity producing country.
“In the past 15 years, for example, there was a huge additional investment, we realised a 50 per cent or more capacity generation with regards to the plan, but an opposite situation is also true in long term planning,” said Yohannes Hailu, a regional energy policy expert.
“The more we delay in planning, the more things are undertaken in a manner that does not respond to the demand pressure.”
Christian Rwakunda, the permanent secretary at the Ministry of Infrastructure, said the proposed policy will help address energy related challenges in the long term.
“For example, in 2009, our wood biomass energy deficit was at 21 per cent, come 2020, we will have a higher deficit, of 27 per cent; therefore, from household energy security point of view, we need to work towards a proper demand and supply balance,” he said.
“This can only be achieved through stronger policies both at the national and regional level.”
Rwakunda also cited ongoing national efforts to expand fuel reserves capacity from the current 30 million liters to 70 million litres by the end of 2015, and later to 200 million litres, by 2017.
Earlier, Rwanda is said to have been encountering losses (not yet determined) due to unfair competition in the bloc where fuel consumers, mostly truck drivers, preferred to fuel their vehicles from Kenya or Tanzania.
While pump prices in Kenya and Tanzania are below $1 (Rwf722) a litre, in Uganda, Rwanda and Burundi, a litre goes for $1, 25 (Rwf903); $1,29 (Rwf935); $1,3 (Rwf939), respectively, largely owing to transport costs and excise duties.
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Mixed consensus emerges at AGOA forum
The 14th African Growth and Opportunity Act (AGOA) Forum took place from 25-27 August in the Gabonese capital, Libreville. Considered the central pillar of economic relations between the US and sub-Saharan Africa, AGOA provides duty-free quota-free access to the US market for over 6000 products. Its renewal in June until 2025 had been enthusiastically welcomed by many.
The Forum was attended by over 1,000 delegates from 39 AGOA-eligible countries and the US with a view to discuss the opportunities offered by the scheme, to examine the new legislation renewing AGOA for the next 10 years, and to think about ways of increasing the benefits that Africa can draw from this partnership. The Forum also saw the development of a commercial mini-fair, during which many exhibitors presented their products in search of support for marketing in the US.
A mixed picture
Following the event, the consensus drawn by many African actors seemed quite mixed. While it is true that the interest or even the necessity of such AGOA legislation seems generally accepted, there are many who point out that the preference regime has not fully achieved its intended objectives. Indeed, trade between Africa and the US remains very limited and highly concentrated in certain sectors. At present, only 1 percent of US imports come from the 39 African countries benefiting from AGOA. According to data provided by the US Department of Commerce, exports from AGOA countries to the US have fallen from US$72.4 billion in 2011 to US$25.6 billion in 2014. Given that the hydrocarbon sector alone accounts for most of the African exports under AGOA, the sharp fall in US imports has led to a slump of total AGOA trade.
“All African countries have not benefited from AGOA,” insisted Ngoulakia Barthelemy, President of the Scientific Committee of the Libreville Forum, during a press conference following the first closed-door meeting. Until now, only a few countries have managed to take advantage of the opportunities offered under AGOA. These include Nigeria, Angola, Chad, Congo-Brazzaville and Congo, and South Africa, which unsurprisingly are some of the largest oil producers in the region. As an explanation for these lackluster performances, many people point to the failure of African infrastructure – physical and institutional – which, in their current state, do not allow countries to take full advantage of the opportunities offered by AGOA.
Another readily advanced reason is the low levels of competitiveness and lack of human capital characterising many African countries. Capacity building, notably to allow market players to more easily comply with US and international standards is necessary. In this regard, several signals at the AGOA Libreville Forum suggest that the US is prepared to pursue this course, in particular to support non-oil sectors. Régis Immongault, Gabon’s Minister of Economy, Investment Promotion, and Opportunity, said in a recent interview that the US could also do more in terms of market access.
“We cannot pretend to ignore the timidity with which the US opens their markets when it comes to other non-hydrocarbon sectors,” he said.
New unappreciated provisions
The Forum also enabled African officials to look into the new version of AGOA where it emerged that some of the new provisions are not favourable to all.
“Compared to the new law, there are fundamental non-trade related changes that have taken place concerning mainly human rights and child labor,” said Bartholomew Ngoulakia following the first closed-door meeting.
“Today, the US president can decide to exclude a country because it has not met the commitments made in relation to AGOA,” added Ngoulakia, noting that Africans do not really enjoy this prerogative. If a determination of exclusion is made, African representatives suggest that the period granted to the State in question be extended to several months instead of 60 days.
“60 days is really not sufficient to comply with any comments or injunctions,” insisted Ngoulakia. Despite such resistance, it should be noted that the new version of AGOA is substantially similar to the previous one.
Maximising the potential of AGOA
In his video message to the AGOA Forum, Barack Obama stressed the virtues of AGOA. “AGOA is creating economic opportunities for families across the continent and helping African companies to improve their competitiveness, while creating an environment conducive to the growth of private sector investment,” he insisted. According to the US, AGOA has helped to create approximately 300,000 direct jobs in eligible countries. Nevertheless, given the mixed performance of exports benefiting from AGOA, both Africans and Americans at the Forum called for further efforts to ensure that the opportunities offered by the preference scheme are more leveraged and beneficial to all eligible countries.
“The instrument of economic and trade cooperation made available by AGOA should encourage us to redouble our efforts in the utilisation of its implementation mechanisms, so that the greatest number of African countries can benefit, “said the Prime Minister of Gabon, Daniel Ona Ondo. The Gabonese Minister of Trade and Chairman of the AGOA Forum, Gabriel Tchango, has meanwhile called on African countries to develop strategies to this effect, while indicating that Gabon intends to seize the opportunity provided by AGOA “to fully harness the potential for economic diversification”.
”We are in a process of reforming our economy and AGOA is a tool that has come just when African countries have embarked upon an era of reform. This is our time to capitalise on this opportunity,” he insisted. On the American side, a similar message could be heard. “We must ensure that the potential of AGOA is fully exploited and that its benefits are fully utilised. This will require work on both sides of the equation,” affirmed Michael Froman, US Representative for Foreign Trade, at the opening ceremony of the AGOA Forum.
“Our African partners will devise strategies to take full advantage of tariff preferences under AGOA, and the US will have to ensure that they provide the capacity building and trade-related assistance that are needed to support these strategies,” he added.
Last lap for AGOA?
According to some, the 10-year AGOA extension approved in June could be the last of this preference scheme as we know it. Indeed, some evidence suggests that the US may seek to pass, in the relatively near future, a scheme based on greater reciprocity in their economic relations with sub-Saharan African countries. At a time when the European Union has already begun this turning point with the conclusion of the Economic Partnership Agreements, the US could potentially follow suit. In May, a bill entitled “Africa Free Trade Initiative Act” was introduced to the Senate by US Senators Chris Coons and Jim Inhofe. The latter was meant to confront the US president with a plan to negotiate and conclude free trade agreements with countries in sub-Saharan Africa. Until now, however, it has not received the expected support. During the AGOA Forum, Michael Froman unreservedly welcomed the renewal of AGOA for a period of 10 years, but he also stressed that “we must also begin to think about our long-term trade and investment relationship.”
In a blog post recently co-signed with Dana Hyde, CEO of the Millennium Challenge Corporation, Froman is even more explicit, making calls to “look beyond 2015, and imagine what a more mature economic partnership relationship would imply”. When Peter Henry Barlerin, Director of Economic and Regional Affairs in the Africa Bureau of the US State Department, was recently questioned on the subject, he provided the following response: “This is precisely the theme of the forum held in Libreville. AGOA dates back 15 years, we want to pave the way towards more sustainable partnerships between the US and Africa in the field of trade and investment. We have 10 years to move towards a more reciprocal relationship. This is good not only for the US but also for sub-Saharan Africa.”
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Promotion and Protection of Investment Bill in line with global trends: dti
The Promotion and Protection of Investment Bill affirms the country’s sovereign right to regulate in the public interest and pursue its broad transformational agenda. This is according to the Deputy Director-General of International Trade at the Department of Trade and Industry (the dti), Ms Xolelwa Mlumbi-Peter. She was presenting the Bill to the Portfolio Committee on Trade and Industry and the Select Committee on Trade and International Relations in Parliament, Cape Town on 1 September.
The primary objectives of the Bill are to clarify the level of protection that an investor may expect in South Africa and to further ensure that South Africa remains open to foreign investment.
Ms Mlumbi-Peter said the Bill follows a comprehensive review of the Bilateral Investment Treaties (BITs) and the risk associated with these.
“In addition, the Bill clarifies the BITs-type provision in a manner that is consistent with the South African Constitution. The Bill has been introduced at the opportune time given that such introduction of legislation is in keeping with global trends. This Bill contains the standards of protection applicable to investments whilst ensuring alignment to the South African Constitution and other applicable domestic legislation,” she said.
Mlumbi-Peter added that the international investment law concepts such as national treatment, protection and security, protection of property and the transfer of funds in line with constitutional principles and applicable norms are reflected in the Bill.
“Such provisions do not interfere with the protection afforded to investors under the existing BITs which would continue to prevail until expiration. The Bill confirms the investors’ right to make use of any legal avenue available in the South African legal system to enforce their rights. In addition, the Bill also provides for a state-state dispute settlement mechanism after exhaustion of the domestic remedies,” stated Mlumbi-Peter.
At a recent Portfolio Committee on Trade and Industry seminar, the United Nations Conference on Trade and Development (UNCTAD) endorsed the Bill and confirmed that the proposed legislation was timely and in line with global trends. UNCTAD’s Director of Investment and Enterprise, Mr James Zhan, re-affirmed that South Africa’s stance on the introduction of such legislation would achieve the appropriate balance of rights and obligations between investors and the state. He further emphasised that the Bill includes a dispute avoidance mechanism through mediation which is an innovative mechanism to deal with concerns of investors.
The public participation process will be held for the duration of September wherein stakeholders’ submissions will be considered and deliberations thereto will be held by the relevant Parliamentary Committees.
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Spotlighting sustainable development, ‘Global Goals’ campaign launched at UN
As United Nations Member States prepare to adopt a new set of Sustainable Development Goals, a ground-breaking collaboration of campaigners, public figures, companies and civil society groups are uniting to tell seven billion people in seven days that “it’s time to change the world.”
During a press conference at UN Headquarters on 3 September, the Global Goals campaign, founded by filmmaker Richard Curtis, was announced as aiming to make the 17 UN Goals famous and to push for their full implementation worldwide.
Described as an “unprecedented effort,” the campaign is supported by a variety of other social movements including action/2015 – a coalition of over 2000 organizations – and Global Citizen, a community of ordinary people that help fight extreme poverty.
The campaign has been launched in the wake a momentous event earlier this week: the UN General Assembly approved a resolution sending the draft ‘2030 Agenda for Sustainable Development’ to Member States for adoption at a Summit in new York later this month.
The Agenda, its 17 proposed Goals and 169 targets aim to be a charter for people and planet in the twenty-first century. They will stimulate action over the next 15 years in areas of critical importance towards building a more equitable and sustainable world for all.
Speaking to journalists with only 22 days to go before the UN Sustainable Development Summit, the Under-Secretary-General for Communications and Public Information, Cristina Gallach, said 2015 is a “unique year.”
“Being famous is absolutely necessary to ensure that [the goals] are implemented,” Ms. Gallach said. “We couldn’t have a better partner for this process than Richard Curtis’s team. Everybody will be able to resort to his creative products that are going to serve as a major asset to ensure that the Goals are known.”
Mr. Curtis, the filmmaker behind major international hits such as Four Weddings and a Funeral, Notting Hill,, and Mr. Bean, presented “Project Everyone,” the mission of which is to get a “short, dynamic and snappy” explanation of the global Goals to all of the planet’s citizens.
“I was looking forward to 2015 and thought I should do something in order to try and make these new goals much more famous and much more well-known than the Millennium Development Goals were,” Mr. Curtis explained.
“And it came as no surprise to me that as I started to say these things, I found out that so many people that I’d worked with before, so many of the NGOs [non-governmental organizations] and campaigners also felt the same thing.”
The British scriptwriter began working with the United Nations on a campaign that would be “fun, bright, entertaining, and interesting,” to attract attention, especially of young people. One outcome is the first ever global cinema ad, an animation produced by Aardman featuring world leaders depicted as animals. It is expected to appear in movie theatres in over 30 countries.
Meanwhile, the UN Secretary-General”s Special Adviser on Post-2015 Development Planning, Amina Mohammed, noted that she has just returned from her home country Nigeria, where she travelled by road through Boko Haram-controlled territory.
“It’s important that this set of Goals is known by everyone, in the hamlets and the villages of Nigeria,” Ms. Mohammed said. “This is coming to make a difference in their lives.”
She also stopped in Austria where she spoke with young people faced by the challenge of migration.
“This agenda […] is not about just stemming the tide of what is happening with forced migration,” she explained. “But it is about dealing with root causes so that people don’t have to flee their own countries, their own villages, their own homes because they can’t have a life of dignity there.”
Finally, 22 year-old Shaila Huq, spokesperson for the action/2015 campaign, said the Global Goals campaign speaks to her entire generation, which could be the first one to live in a world without extreme poverty.
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tralac’s Daily News selection: 3 September 2015
The selection: Thursday, 3 September
The inaugural African Tax Research Network congress has started in Cape Town. Follow the discussion on twitter, #ATRN2015
How is Africa preparing for COP21? Follow the ClimDev, Dar es Salaam conference, #ACTAfrica
For the purposes of resolution No. 2, the EAC should formulate a regional Local Content policy which clearly defines ‘local’ in a regional content to ensure that preferential treatments accorded to nationals are extended to all suppliers within in East Africa region.
The EAC should formulate a regional strategy for engagement with China in a view to leveraging and attracting Chinese investors, and re-location of manufacturing into the region taking advantage of the rising labour costs in China.
The EAC to enact a law and put in place an effective enforcement mechanism that will deter import, production, sales, and distribution of counterfeit and illicit goods.
Trade experts slam Kenya-Uganda sugar deal feud (New Times)
The first-ever East African manufacturing business summit closed yesterday in Kampala with participants urging partner states to recommit themselves to the customs union and avoid protectionism in order to allow for free trade and fair competition to prevail in the region. Speaking at the two-day summit, Dr Mukisa Kituyi, the secretary general of United Nations Conference on Trade and Development, said the current hullabaloo in Kenya over Ugandan sugar exports is a symptom of an inefficient EAC customs union authority. “If there was an efficient and properly working customs union authority there would be no notion of exporting from Uganda to Kenya because you would not call that exporting,” he said.
More than 50 African trade-in-services negotiators, officials trained (UNCTAD)
Trade negotiators from 19 Anglophone African countries and African Union Commission officials benefitted from training provided by international, regional and national experts in an intensive workshop on trade in services negotiations in Nairobi, Kenya, on 24-28 August. Participants learned about the importance of services trade in African development, services negotiations at the global and regional levels, and possible options and approaches to services negotiations at the pan-African level, including in sensitive sectors such as labour mobility. The participants unanimously called for further such training to be conducted, preferably back-to-back with formal African Union services negotiating sessions.
More than US$2.3bn in trade between Brazil and Angola in 2014 (MacauHub)
Official 2014 figures from the Ministry of Development, Industry and Foreign Trade show that Angola exported to Brazil products worth US$1.261bn during that year while importing Brazilian merchandise worth US$1.109bn. Bilateral trade figures for the period from January through July 2015 nevertheless indicate a major slowdown, with Brazil, for example, importing Angolan products worth US$17.8m, versus US$487.5m in the same period of 2014. During the same period Brazil’s sales to Angola fell by nearly a half, from US$632.6m from January through July 2014 to US$353.8m during the first seven months of 2015.
South Africa offers UK best trade potential on Barclays Index (Bloomberg)
South Africa is the most open and potentially lucrative country on the continent for U.K. companies looking to expand their businesses, according to the first edition of the Barclays Africa Trade Index. Of 31 sub-Saharan countries, South Africa ranked second in terms of abundance of opportunities after Nigeria and first for openness and ties to other African states, according to the index, commissioned by London-based bank Barclays Plc. “While South Africa is the standout performer in the overall index, Nigeria arguably represents the most exciting long-term opportunity for U.K. businesses,” Barclays said in the report published Thursday. “However, its performance in terms of openness, 12th, and intra-African connectivity, 16th, means that Nigeria still has a long way to go before it can hope to compete with South Africa as a regional trade hub or as a gateway to other African markets.”
Treasury on Moody’s affirmation of South Africa’s ratings (GCIS)
BMF Transformation Barometer Research Report 2015 (Black Management Forum)
Swazis risk losing Europe trade benefits (Business Report)
The Swaziland government has responded with defiance against a European Parliament resolution calling on King Mswati to honour its treaty commitments on labour and human rights. EU parliamentarians meeting in Brussels warned in their resolution that non-compliance would jeopardize Swaziland’s R20 billion in exports to the European Union (EU).
Lesotho: IMF completes 2015 Article IV Mission (IMF)
Looking ahead, Lesotho faces a challenging economic outlook, and growth for 2015 is expected to slow to about 2½%. The economy depends heavily on Government spending, financed largely by revenues from the Southern African Customs Union. But SACU revenues, which are highly volatile, have begun to slip and are expected to fall sharply in the next fiscal year, 2016/17 (to just over 15% of GDP, compared with almost 30% in 2014/15).
Mozambique: FinScope Consumer Survey 2014 (FinMark Trust)
The Government, through its Financial Inclusion Action Plan, is currently designing a Financial Inclusion Policy with assistance from the World Bank as a follow-up action foreseen by the Mozambique Financial Sector Development Strategy (MFSDS) 2013 – 2022. One specific financial inclusion objective of this strategy is to ensure that 35% of adult Mozambicans have bank accounts by 2022. This brochure summarises the findings of the FinScope Consumer Survey 2014 and, as such, will address the information needs that would enable the Government of Mozambique to develop and monitor evidence-based policies and regulations which will help extend the reach of financial services in Mozambique.
Zimbabwe: ‘Competition policy needs review’ (NewsDay)
The United Nations Conference for Trade and Development lead consultant, Allan Mlulla, said the objectives of the draft policy would be to address problems related to the control of mergers and acquisition cartels and misuse of market power in key sectors. He recommended that there should be a comprehensive competition policy for Zimbabwe. The policy will provide guidance on treatment of social, economic and legal issues facing Zimbabwe competition legal framework.
Zimbabwe's energy regulator hires SA firm, Genesis Analytics, for fuel pricing model (NewsDay)
Tanzania: Cashew nut fund to construct three processing plants valued at 115bn/- (IPPMedia)
The Cashew nut Industry Development Trust Fund is planning to spend 115bn/- for the construction of three modern processing plants so as to increase the value of the crop and create more jobs. Speaking during a cashew nut stakeholders meeting here, the CIDTF Executive Secretary Selemani Lenga said the planned plants will be constructed at Mangamba area in Mtwara, Tunduru in Ruvuma and Mkuranga in Coast regions. He said once completed, the factories will have the capacity of processing at least 30,000 tonnes per year, (10,000 tonnes per each factory).
Tanzania's Bakhresa to take over Blue Ribbon in Zimbabwe (The Herald)
Dar, Mombasa ports need to complement each other (Tanzania Daily News)
Trademark East Africa says it supports upgrading of Dar es Salaam and Mombasa ports, not for them to compete against each other, but to serve the region better in the wake of booming trade. The TMEA Board of Directors Chairman, Mr Ali Mufuruki, said last week that their support to improve physical capacity and efficiency at the two ports was not focused on competition but to help them optimise their potential as "they operate far below their capabilities."
Namibia: Logistics infrastructure fits together (Informante)
The development of Namibia’s logistics network can only yield maximum returns if it takes place in a coordinated way. Port, airport, rail and road infrastructure development should roll out parallel, to complement one another and to avoid certain segments of the network not able to cope with increased demand. This was said in Swakopmund by the chairman of the Walvis Bay Corridor, Bisey Uirab during the celebration of the 15th year since inception of this body which was created to develop Namibia as a regional logistics hub in Sub-Sahara Africa.
COMESA takes initiative to harmonize mineral policies in Member States (COMESA)
Secretary General Sindiso Ngwenya says the policy will be guided by the Africa Mining Vision and will lay emphasis on mining for development and socio-economic transformation. Mr Ngwenya was speaking today during the opening of the African Down Under mining conference in Perth, Australia. “An important aspect of the harmonized environment would be on optimizing the fiscal frameworks through appropriately configured taxation mechanisms,” Mr Ngwenya said.
Mainstreaming gender in natural resources management in the work of the ANRC: EOI (AfDB)
Grim outlook for Kenya’s Sh100bn AGOA target (Daily Nation)
Kenya is not likely to meet its target of Sh100 billion ($1 billion) in earnings by the end of 2017 from textile exports, analysts have said. Ecobank Capital soft commodities analyst Victoria Crandall said the country is currently producing an eighth of the cotton it requires for optimum production. Industrialisation Cabinet Secretary Adan Mohamed, however, dismissed the report, saying the targeted Sh100 billion would be facilitated by imported textile and not the local upstream industry. “The initiative to start local farming is totally different and the textile we import from China and sew here, and sell to the United States is expected to gradually pick up in the next three years,” he told the Nation at Kilimo House yesterday.
‘Agrocorridors’ to boost food security (African Business Magazine)
Nogales is an open proponent of economic “agrocorridors”, which she believes can serve as a strategic tool to bring private capital and large-scale investment to agricultural projects in Africa. This, she believes, will benefit smallholder farmers and boost food security. Agrocorridors are development programmes that foster agriculture along lines of transportation such as highways, railroads, ports or canals. They integrate investments, policy frameworks and local institutions.
Land rights: an essential global indicator for the post-2015 SDGs
Leveraging decades of extensive expertise, a broad coalition of global and national organizations, civil society, and experts, including the United Nations Environment Program, the Women’s Major Group, the International Union for Conservation of Nature, and the UN Sustainable Development Solutions Network, recommends the following Land Rights Indicator. Universal and feasible, this recommended land rights indicator is vital to four of the sustainable development goals, including ending poverty (goal 1), ensuring food security (goal 2), achieving gender equality and empowering women (goal 5), and making cities and human settlements inclusive (goal 11).1 This indicator, best placed under Target 1.4, would capture gender equality and progress of all people’s on-the-ground rights to land, property, and natural resources.
Helen Clark: statement to the Second Regular Session of the UNDP Executive Board (UNDP)
Looking ahead, we need to ensure that all countries, and in particular the poorest and most vulnerable, are able to access the range of financing opportunities which is available. UNDP is already supporting national partners, especially in LDCs and SIDS, to ensure that diverse financing streams can complement and reinforce each other – for example by implementing Development Finance Assessments, first in seven countries of the Asia Pacific, and now also beginning in Africa. This work maps the complex resource flows, and designs integrated national financing frameworks which will support an actionable agenda on SDGs. It is particularly important to find synergies between development and environment finance. Greater synergies between humanitarian and development finance would help too.
G20 finance ministers, central bank governors: IMF note on global prospects and policy challenges
Structural reforms to raise sustainable growth differ across countries. They include removing infrastructure bottlenecks in the power sector (India, Indonesia, South Africa); easing limits on trade and investment and improving business conditions (Brazil, Indonesia, Russia); and implementing reforms to education, labour, and product markets to raise competitiveness and productivity (Brazil, China, India, South Africa) and government services delivery (South Africa). In India, the post-election recovery of confidence and lower oil prices offer an opportunity to pursue much-needed structural reforms. [Download]
11 potential effects of the Chinese Yuan devaluation on the Ghana Cedi (STARR FM)
Do you smell the money? Accra, Nairobi seen adding dollar millionaires faster than any other African cities (M&G Africa)
Weak SADC Tribunal a regression on democracy (Crisis in Zimbabwe Coalition)
Swaziland: Rand/Lilangeni slump good news for local sugar industry (Swazi Observer)
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1st East African Manufacturing Business Summit: Resolutions on Manufacturing
THE KAMPALA RESOLUTIONS ON MANUFACTURING
1. The 1st Manufacturing Business Summit was held in Kampala Uganda at Speke Resort, Munyonyo on 1-2 September 2015. The Business summit was officially opened by Rt. Hon, Dr. Ruhakana Rugunda, the Prime Minister of the Republic Uganda.
2. The Summit was attended by H.E Dr. Mukhisa Kituyi, UNCTAD Secretary General, Amb. Richard Sezibera, EAC Secretary General, Hon. Amelia Kyambadde, the Minister for Trade, Industry and Cooperatives, Hon. Adan Mohamed, Cabinet Secretary for Industrialization and Enterprise Development, Kenya, Hon. Tabu Abdallah MANIRAKIZA, Minister for Finance Republic of Burundi, Hon. Adam Kighoma Ali MALIMA Deputy Minister for Finance, United Republic of Tanzania, Dr. Joseph Mungarulire, representing the Minister for Trade and Industry, Republic of Rwanda, Mr. Denis Karera, EABC Chairman, Amos Nzeyi, UMA Chairman . The Summit was also attended by Representatives from development partners and regional economic communities (RECs) including: UNIDO, AfDB, CBC, UNECA, AMDC, World Bank, TMEA, GIZ, PTB, COMESA, NEPAD and SADC.
3. The 1st Manufacturing Business Summit was jointly organized by East Africa Community Secretariat and East African Business Council and hosted by the Government of Uganda. The forum ushered in a new dawn in the history of manufacturing in East Africa region as it brought together for the first time all shareholders in manufacturing under one roof to discuss the question of manufacturing and its role in deepening the integration and fostering economic growth in EAC.
4. The forum made the following resolutions on this date of 2nd September 2015:
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To effectively utilize the available resources within the region for structural transformation of the manufacturing sector in key value chains, a regional special purpose vehicle (SPVs) that facilitate joint investment in capital intensive and flagship projects should be established (lessons can be drawn from Maputo Development Corridor, or Air-bus Project in EU). The framework should outline each country’s comparative and competitive strength in resources and inputs, and how EAC countries can collaborate and develop such strategic industries to avoid harmful competition.
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Public and private procurement is key to creating necessary demand for locally manufactured products as well as promoting technology based business start-ups. To this end, the government of East Africa Partner States and the private sector are called upon to prioritize in their procurement, the sourcing of locally manufactured products including in agro-food, furniture, motor-vehicles, parts, apparels and footwear. The EAC Secretariat in collaboration with EABC should prepare a regional promotional strategy for the implementation of Buy-East Africa-Build- East Africa scheme (BEABEA).
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For the purposes of resolution No. 2, the EAC should formulate a regional Local Content policy which clearly defines ‘local’ in a regional content to ensure that preferential treatments accorded to nationals are extended to all suppliers within in East Africa region.
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The EAC to formulate a regional policy for motor vehicles , textiles & apparels, leather & footwear to create a coherent policy regime for the development of these sectors which are crucial for employment creation, poverty reduction and advancement in technological capability.
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EAC in collaboration with EABC to formulate a regional skill development and partnership programme targeting mainstreaming of apprenticeship, internship and graduate on-job training in school, TVET and university syllabuses/curriculum.
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Energy (power) is a vital input into manufacturing constituting between 20-50 percent of the cost of production. The East Africa Partner States are called upon to take measures to reduce the cost of power to through: reforms in the energy/power sector to reduce power lose, permitting industries to generate their own power and supply excess to the national greed, and introducing energy efficiency and conservation measures in industries. To this end, EAC and EABC should organize a regional conference on “Competitive Energy Supply for sustainable Growth of Manufacturing in East Africa”.
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The EAC should formulate a regional strategy for engagement with China in a view to leveraging and attracting Chinese investors, and re-location of manufacturing into the region taking advantage of the rising labour costs in China.
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The EAC to enact a law and put in place an effective enforcement mechanism that will deter import, production, sales, and distribution of counterfeit and illicit goods.
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The Summit decided that Manufacturing Business Summit is to be held annually and the date and venue will be communicated in good time. The EAC and EABC calls upon Development Partners and EAC Partner States to support convening of the 2nd Manufacturing Summit.
ADOPTED THIS DAY OF 2ND SEPTEMBER 2015, AT SPEKE RESORT, MUNYONYO, KAMPALA UGANDA
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“UNDP deeply involved in visionary agenda for sustainable development” – UN Development Chief
The new Sustainable Development Goals (SDGs) will guide global development for a generation after they are formally adopted by Heads of States and Governments at the end of this month, the UN Development Programme’s (UNDP) Administrator Helen Clark told the Organization’s governing body on 1 September at UN Headquarters.
The SDGs are “a strong, ambitious, and visionary set of commitments, with poverty eradication identified as the most urgent task within the broader agenda for sustainable development,” Helen Clark said, addressing the UNDP Executive Board, which is holding its current session from 30 August - 4 September.
“UNDP is deeply involved in all processes around the SDG roll out,” she added, and “we are bringing our extensive programming experience to bear in supporting countries to develop their national SDG efforts.”
All 193 UN Member States are expected to adopt the SDGs here at the Sustainable Development Summit being held 25-27 September. The SDGs are a global call to action to end poverty, protect the planet and ensure that all human beings enjoy peace and prosperity, leaving no one behind. In addition, an agreement on climate change is expected at the Paris Climate Change Conference, or COP21, this December.
Helen Clark illustrated the urgency of this ambitious vision by pointing to several ongoing crises around the world. Whether it be the response after the earthquake in Nepal, the ongoing conflict in Syria, the flooding in Myanmar, the critical electoral process underway in Haiti, or the Ebola outbreak in West Africa, the need for development to be resilience-based and sustainable is constant and paramount. To fill this need, UNDP focuses on building a knowledge-driven, innovative and open institution that supports developing countries with high quality policy advice, and effective and efficient operations.
“We look forward to the Board’s ongoing support at this time of many crises requiring our response, and of new global agendas requiring our support for implementation,” Helen Clark concluded.
The UNDP Executive Board is made up of representatives from 36 countries around the world, serving on a rotating basis. Through its Bureau, consisting of representatives from five regional groups, the Board oversees and supports the activities of UNDP, the UN Office for Project Services (UNOPS) and the UN Population Fund (UNFPA), ensuring that these organizations remain responsive to the evolving needs of programme countries.
Helen Clark: Statement to the Second Regular Session of the UNDP Executive Board*
I am delighted to welcome you to the Second Regular Session of the United Nations Development Programme (UNDP) Executive Board. Since we met in June at the Annual Session of the Executive Board:
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the final “Millennium Development Goals (MDG) report”, issued by the United Nations Secretary-General, has been released. This is an important milestone as we near the end of the MDG era;
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the Third International Conference on Financing for Development in Addis Ababa reached consensus on a new framework for development financing; and
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here in New York, negotiations on the post-2015 sustainable development agenda concluded successfully. We very much look forward to leaders from around the world gathering here later this month to adopt the new global agenda for sustainable development.
In my statement today, I will comment further on these developments and on:
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the support UNDP will give to implementation of the new global agreements negotiated this year;
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the UN development system reform agenda; and
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our ongoing work on transparency and accountability.
The Executive Board’s agenda this week has a dedicated session on funding – including an important dialogue on how UNDP is adapting to the new development finance landscape, and the importance of predictable, flexible, and quality funding. I will also comment briefly on these issues.
The global agendas being determined this year
On 2 August, UN Member States concluded their negotiations on the post-2015 agenda for sustainable development – “Transforming our World: the 2030 Agenda for Sustainable Development”. The agreed text is a strong, ambitious, and visionary set of commitments, with poverty eradication identified as the most urgent task within the broader agenda for sustainable development. After the new agenda is formally adopted by Heads of States and Government at the end of this month, it will guide global development for a generation.
UNDP can support, and is already supporting, countries in three different ways, through the MAPS approach:
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Mainstreaming
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Acceleration
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Policy Support
This sees us:
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providing support to governments to reflect the new global agenda in national development plans and policies. This work is already underway in many countries at national request;
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supporting countries to accelerate progress on SDG targets. In this we will make use of our extensive experience over the past five years with the MDG Acceleration Framework; and
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making the UN’s policy expertise on sustainable development and governance available to governments at all stages of implementation.
Collectively, all partners can support communication of the new agenda, strengthening partnerships for implementation, and filling in the gaps in available data for monitoring and review. As Co-Chair of the UNDG Sustainable Development Working Group, UNDP will lead the preparation of Guidelines for National SDG Reports which are relevant and appropriate for the countries in which we work.
UNDP is deeply involved in all processes around the SDG roll out. The guidance and tools being developed will be shared as they become available. As well, we are bringing our extensive programming experience to bear in supporting countries to develop their national SDG efforts. There is a briefing session on this on the Board agenda for Thursday.
Financing for development
Financing needs for implementation of the new global development agenda and national development agendas are great. The Addis Ababa Action Agenda, agreed in July, has updated the financing for development framework; set important priorities for development investment – including in social protection, jobs creation, nutrition, and agriculture; and agreed on new global technology and infrastructure financing mechanisms.
The agenda from Addis Ababa highlights the critical need for continued Official Development Assistance, and for its more strategic use to build national capacities for domestic resource mobilization. From inclusive and sustainable growth will flow tax revenue for development spending. Investments in capacities of governments will support tax collection, budget allocation to development priorities, and implementation of policies and plans. Effective governance also builds investor confidence and helps stem illicit financial flows.
On capacity building for domestic resource mobilization, UNDP and OECD have launched a partnership to provide “Tax Inspectors Without Borders”. It will place international tax audit experts alongside national tax authorities, to help build their capacity to assess and collect the tax which should be being paid to them by international companies. The experts will be drawn from North and South.
Looking ahead, we need to ensure that all countries, and in particular the poorest and most vulnerable, are able to access the range of financing opportunities which is available. UNDP is already supporting national partners, especially in LDCs and SIDS, to ensure that diverse financing streams can complement and reinforce each other – for example by implementing Development Finance Assessments, first in seven countries of the Asia Pacific, and now also beginning in Africa. This work maps the complex resource flows, and designs integrated national financing frameworks which will support an actionable agenda on SDGs. It is particularly important to find synergies between development and environment finance. Greater synergies between humanitarian and development finance would help too.
Looking ahead to COP21
Countries now have nine negotiating days left until the Paris Climate Change Conference – COP21 – where the aim is to adopt a new, global agreement on climate change. Agreement in Paris has the potential to stop catastrophic and irreversible climate change – but we are not yet seeing the level of ambition required, as the UN Secretary-General and many others are pointing out. This must change in the interests of all peoples and countries and in particular of the poorest and most vulnerable.
The stakes are high. UNDP will continue to support the “Road to Paris” through sharing expertise and experiences from our $1.3 billion portfolio of climate change mitigation and adaptation projects in over 140 countries; strengthening capacities of negotiators from LDCs and SIDS; and partnering with the COP Presidencies from Peru and France. In addition, we have hosted seven regional dialogues on the technical elements of Intended Nationally-Determined Contributions (INDCs), and are organizing three more in Morocco, Uganda and Samoa. We have also developed the first guidance note to support countries as they make important choices on their INDCs – now distributed among experts, government officials and institutions in 150 countries.
Climate action is definitely needed from governments, but the role of the private sector is also indispensable. Policy and regulatory settings are important – UNDP is supporting countries to amend these to create environments conducive to private sector investment in renewable energy and other areas of adaptation and/or mitigation.
An example – in South Africa and Uruguay, UNDP has been helping to lower barriers to private sector investments in the wind-energy sector. These interventions created new jobs; supported economic growth; diversified energy sources; and contributed to Nationally Appropriate Mitigation Actions (NAMAs).
UNDP is one of twenty organisations approved for accreditation by the Green Climate Fund. We have been working with a number of countries to support preparation of projects for the GCF to consider in its first funding allocation round later this year.
UNDP is planning a ministerial-level event to take place in late February next year, which will be a key occasion to mark both the fiftieth anniversary of UNDP’s founding and the beginning of the SDG era. The event will showcase UNDP’s fifty year journey of promoting sustainable development by supporting the transformation of countries and societies. It will enable us to recognize the substantial long-term collaboration and investments of our partners, and to provide a detailed briefing on UNDP’s approach to and package of support for SDG implementation at country level. A “hold the date” letter is going out now.
* Read the full statement here.
‘Agrocorridors’ to boost food security
Farming projects along lines of transportation are being promoted as opportunities to attract investment and increase food security.
At a recent event in Nairobi, early-stage venture backer Village Capital brought to a close its programme by inviting a number of startups in the agribusiness space to present their solutions for assisting smallholder farmers.
This saw the likes of Ghana’s Farmerline, which expands access to information to farmers, Rwanda’s Atikus Insurance, an initiative that extends access to credit via reimagined risk solutions, and Mifugo Trade, an online livestock marketing platform, pitching to investors for much-needed financing to scale their businesses.
And in Africa, agriculture is big business.
Across much of the continent, according to the World Bank, agriculture’s contribution to GDP is more than 20%, while in some countries, such as Ethiopia or the Central African Republic, it is higher than the 40-50% mark. Yet farmers, overwhelmingly based in rural areas, traditionally lack access to required networks and finance, with only 1% of commercial loans going to smallholder farmers. This relative underdevelopment of a vital sector, according to UN Food and Agriculture Organisation (FAO) agribusiness economist Eva Gálvez Nogales, is due to a lack of collaboration between various stakeholders, including government and investors.
Nogales is an open proponent of economic “agrocorridors”, which she believes can serve as a strategic tool to bring private capital and large-scale investment to agricultural projects in Africa. This, she believes, will benefit smallholder farmers and boost food security.
Agrocorridors are development programmes that foster agriculture along lines of transportation such as highways, railroads, ports or canals. They integrate investments, policy frameworks and local institutions.
Nogales’ report on the subject for the FAO, ‘Making economic corridors work for the agricultural sector’, highlights a couple of global success stories with agrocorridors, notably the Poverty Reduction and Alleviation Project in Peru, which began in 1998.
The novel approach relied on “star connector firms” that were able to quickly expand commercial networks along 13 corridors in the country, with the result being a “flowering” of overlooked market opportunities. Peru is now the world’s third-largest exporter of artichokes, produced through outgrower contracts and processed in several corridors. The government continued the approach after the bilateral agency responsible for it had departed, and it has been duplicated in a number of sister programmes. In Africa, thus far, the benefits of such agricultural corridors remain mostly overlooked, though Mozambique and Tanzania have started programmes aimed at implementing them. Nogales says implementation is hard work as it requires all stakeholders to rally around an agenda.
“It is a very recent development,” she says. “What has been going on for the last two decades is more transportation corridors linking ports to different cities and production areas to areas of consumption.
“The natural next level in terms of corridor evolution would be trade corridors, but that hasn’t been promoted in Africa for the time being. But for the last two years there has been this movement towards agrocorridors.”
Peru may have seen success with agrocorridors, but there is no “one size fits all” approach, with the FAO report saying effective corridors need to be geared to the competitive advantages of a country rather than “conceived as a miracle method to make a desert bloom”. Nogales says they “should be developed in areas where there is already economic density and untapped growth potential that can be maximised”.
“The idea is not to just invent everything from scratch but to build on what is already going on in terms of transportation and different initiatives,” she says. Collaboration and awareness of mutual benefits are key. Agrocorridors, in principle, give policymakers a framework with which they can assist both consumers and farmers; farmers are provided with better access to markets and credit, and investors are offered supply opportunities to link up with those producers.
“It is about increasing market access and doing that in a way that benefits farmers the most,” says Nogales, adding, “The main challenge for agrocorridors is how to upscale good initiatives that are already taking place but making them wider and attracting other startups, businesses and foreign agribusinesses to follow the examples that are already in place.”
The government’s role in this is crucial, with the development of agrocorridors requiring incentives and the provision of a better investment setup through aspects such as reduced transaction costs.
“The main duty of government is to provide an enabling environment,” says Nogales. “Investments are happening with or without the government’s intervention, but the benefit of agrocorridors for governments is that they can massage and influence investments so they are beneficial for farmers and certain communities.”
Deepening roots
Connectivity, competitiveness and the sense of community are the primary aspect of successful corridors, with stakeholders coming together to identify “soft” targets and harmonise approaches in order to avoid disputes that emerge in the wake of “hard” infrastructure investments. Agriculture as a sector could arguably benefit, but advocates say there are also possible advantages in terms of food security and the environment.
“Corridors can in fact allow for better management of environment risks and practices such as unsuitable monocropping,” says Eugenia Serova, director of the FAO’s Rural Infrastructure and Agro-Industries Division. “The key is for inclusive coordination of stakeholder interests both in the planning and execution phase.”
Extension of this collaboration across borders, increasingly happening within other sectors in various regions of Africa, can only increase the impact of economic agrocorridors. Such an approach has already been tried in Southeast Asia, with the Greater Mekong Subregion corridor programme bringing together Cambodia, Vietnam, Thailand, Laos, Myanmar and some Chinese provinces. Though still in its early stages, there are already improved bridges and customs procedures at border towns and contract farming is beginning to span national frontiers.
Nogales sees this expansion of corridor schemes as potentially beneficial to Africa in the long term too, noting that countries have been hindered by relatively small markets and trade with neighbouring countries. Increasing intra-regional integration could be important for economic growth, but if market opportunities are to be deepened, partnerships and collaboration between government and private sector players may be required both within individual African countries and beyond.
Related News
tralac’s Daily News selection: 2 September 2015
The selection: Tuesday, 2 September
Inaugural speech: Dr Akinwumi A. Adesina (AfDB)
Five priorities will shape our work at the Bank under my Presidency as we advance the implementation of the Bank’s Ten Year Strategy: Light up and Power Africa. Feed Africa. Integrate Africa. Industrialize Africa. Improve quality of life for the people of Africa. Our Bank staff, processes and systems will be shaped to deliver on these critical imperatives. We will become sharply focused on measuring the results of our lending operations on the lives of people. No longer will we judge ourselves simply based on the size of our lending portfolio but on the strength of Africa’s growth and development and the quality of improvements in the lives of the African people. We will be more than a lending institution. We will build a highly competitive, world-class knowledge-driven Bank, to provide top-notch policy and advisory services to countries and the private sector. We will become a true development institution with measurable impacts on the lives of Africans.
African Caucus 2015: Luanda Declaration
We, the African Governors of the IMF and WBG, discussed ways and means through which the Bretton Woods Institutions to support our efforts to: (i) address the challenges of financing for sustainable development; (ii) combating tax evasion and eliminate illicit financial flows; (iii) invest in processing and economic diversification; (iv) finance transformational projects and regional infrastructure; and (v) strengthen the voice and representation of Africa at BWI. [Downloads include: UNECA presentation on economic transformation and diversification in Africa, OECD presentation on illicit financial flows]
Beyond a middle income Africa (ReSAKKS)
The strategic choices facing African countries are important and complex, in light of the major developments occurring across the continent. These developments present both challenges and opportunities and include rapid urbanization, a growing middle class, the rapid rise in the young population entering the labour force, the effects of climate change, and the increased volatility of global food and energy prices. In this context, the 2014 Annual Trends and Outlook Report chapters examine both current and future trends that are likely to shape the trajectory of African economies and the factors driving Africa’s recent growth performance.
The chapters examine the drivers behind the recent growth recovery, the nature and patterns of structural transformation among African economies, past strategies and future outlook for industrialization, the changes occurring in agrifood systems, and the role of major infrastructure sectors in the continent’s past and future growth. They also analyze major global- and continental-level trends that may shape future growth across the continent and affect the region’s integration into global value chains. [Downloads include: Africa in the global agricultural economy in 2030 and 2050, Megatrends and the future of African economies, Renewing industrialization strategies in Africa]
IORA: Enhancing Blue Economy cooperation for sustainable development
The First IORA Ministerial Blue Economy Conference aims to act as an ideal platform to bring together Member States and Dialogue Partners of the Indian Ocean Rim Association to promote Blue Economy in the Indian Ocean region. The conference will focus on four priority areas namely: fisheries and aquaculture, renewable ocean energy, seaports and shipping, seabed exploration and minerals.
Why India must be the leading player in the Indian Ocean region (Economic Times)
Australia must dive into the blue economy of marine resources (The Australian)
Research on Blue Economy gains momentum as Australia and Seychelles' ocean-oriented research institute forges partnerships (Seychelles News Agency)
East African Manufacturing Business Summit: follow it live
Africa welcomes Japan's quality infrastructure model (UNECA)
Infrastructure Africa Business Forum: update (TimesLive)
CEMAC: Transport-transit facilitation (World Bank)
The project's development objectives are to enhance regional trade and integration and sub-regional cooperation between CEMAC and ECCAS member states, and specifically provide the landlocked countries Central African Republic (CAR) and Chad with a better access to the Port of Douala through: (i) assistance to the strengthening of the CEMAC Customs Union; and (ii) improvement of the logistics chain, including road and rail infrastructure to the Port of Douala's hinterland. At a higher level, the project will contribute to the shared growth objectives of the CEMAC countries'PRSPs, by ensuring that the Customs Union is effectively implemented and by improving trade facilitation in the region. It will also support the broader goal of increasing the regional integration of CEMAC member states by improving its core rail and road infrastructure. Furthermore, NEPAD has selected CEMAC as one of the target institutions for Central Africa, and these corridors as the main transport infrastructure to be supported in this sub region.
South African and Lesotho transport ministers meet in Pretoria (The New Age)
The meeting discussed the resuscitation of the Committee of Transport Officials; the process of the uprading of the roads that leads to the borders between South Africa and Lesotho, especially the N8 (under SANRAL), Monantsa (under Free State province) and the Sani pass (under KwaZulu Natal province); the process of the installation of eNatis in Lesotho; the Cross Border Transport issue, particularly the border taxi operators conflict between South Africa and Lesotho and the signing of the Memorandum of Understanding on transport-related matters between the two counties.
Namibia feels the pinch of China’s economic woes (New Era)
“We are definitely impacted by the situation in China because their demand is slowing, but the volumes of trade between us is relatively small, hence so far there is no indication that [bilateral] trade is slowing,” Schlettwein said yesterday. He said there remains space to increase trade because of the recent agreement between the two countries that allows Namibia to export its beef to China. “The volumes of dimension stones and minerals are relatively small, and they are tied into long-term contracts, so I do not think we have a big issue,” he said. “I think if we mitigate it [market crash] early enough we will manage it,” said Schlettwein.
Is 2015 the beginning of the end for Africa’s China-led boom? (Reuters, MoneyWeb)
China-South Africa Economic Forum: update (Global Post)
"You have to transfer skills development and training to the locals. Localize supply chain to value chain. Look at the architecture beneficiation platform for value chain and come to work with us. If you do these you will be successful in this country," dti's Yunus Hoosen, Head for Investment Promotion, said.
Joint China-South Africa arbitration centre set up to resolve commercial disputes (Out-Law)
A new arbitration centre will open in Johannesburg specifically to resolve commercial disputes between Chinese and African parties. The China-Africa Joint Arbitration Centre (CAJAC) will be led by Michael Kuper, the current chair of the Arbitration Foundation of South Africa. Kuper told the industry publication that the new centre would be ready to accept cases from October.
China-Africa International Arbitration Centre: speech by Dep Min John Jeffrey (RSA Department of Justice)
Zambia's power woes: all roads lead to Kariba Dam (Daily Maverick)
Experts have warned that without urgent repairs the Kariba Dam risks collapse, unleashing a ‘tsunami’ of water through the Zambezi Valley, reaching the Mozambique border in just eight hours where it would overwhelm the Cahora Bassa wall, in so doing eliminating 40% of the region’s hydro-electric capacity and putting an estimated 3.5-million human lives at risk. Overlooked, perhaps inevitably, amidst the hyperbole of collapse, destruction and loss of life, is the cost of the poor management of the asset, and the water resource, something that can be relatively easily fixed and where the failure to do so is less dramatic but no less costly. [The author: Greg Mills]
African Governance Architecture Platform: consultation (DGTrends)
The Africa Union Department of Political Affairs, as the Secretariat of the African Governance Architecture Platform, is convening a consultation with the African Union Permanent Representative Committee (PRC) on the operationalisation of the African Governance Architecture and the State Reporting processes under the African Charter on Democracy, Elections and Governance (ACDEG). The PRC consultation will be held from 2 – 4 September, 2015 in Arusha, Tanzania.
Mozambique issues new deadline for completion of Sena rail line rehabilitation (Club of Mozambique)
11th SADC CSO Forum calls for inclusion of citizens in regional decision making (Southern African Trust)
Festus Nghifenwa: 'Regional cooperation on banking regulation – why is it needed?' (New Era)
Durban Marukutira: The wicked side of a dollarised economy (NewsDay)
Carlos Lopes: 'African Migrants - payback time?' (UNECA)
South Korea exports plunge 14.7%, the biggest fall in 6 years (Financial Times)
US-China economic relations: the propeller needs oil (CSIS)
Christine Lagarde, in Indonesia: 'The future of Asian finance', ‘Unleashing Indonesia’s economic potential’
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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)