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African tax experts to meet in Cape Town
Academics, researchers, tax administrators, students, tax practitioners, consultants and decision-makers on fiscal and tax policy in Africa will gather in Cape Town from 2 to 4 September for the inaugural conference of the African Tax Research Network (ATRN).
The conference, with the theme “Contemporary Tax Challenges for African Countries”, will provide an opportunity for the delegates to discuss different aspects relating to national, regional and international tax matters. Academics and practitioners from around the world have been invited to submit papers which will be discussed at the conference.
The conference, at the Garden Court on Nelson Mandela Boulevard, will be addressed by former Minister of Finance, Trevor Manuel, and tax commissioners from around the continent, including the South African Revenue Service Commissioner, Tom Moyane. Other prominent speakers include:
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Dr Edward Larbi Siaw, Tax Policy Advisor and Head of Policy Unit, Ministry of Finance and Economic Planning, Ghana;
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Dr Anthony Mothae Maruping, AU Commissioner for Economic Affairs;
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Patrick Mukiibi, Commissioner Tax Investigations of Uganda Revenue Authority;
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Gaperi Henry, Commissaire Général, Office Togolaise des Recettes (OTR) ; and
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Dr Adam Elhiraika, Director of the Macroeconomic Policy Division, United Nations Economic Commission for Africa (ECA).
Some of the topics under discussion will include the major drivers of revenue losses on the continent (such as illicit financial flows and trade mispricing) and how the continent can maximise domestic revenue. The ATRN conference consists of two parts: there will be three policy panel discussions and several research sessions where more than 40 academic and policy papers will be discussed.
There will be a panel discussion on how investing in improved tax systems can make a critical difference to improve the nexus between policy and administration and enhance domestic revenue mobilisation, promote foreign direct investment, transparency and accountability and improve the standard of living in Africa.
Another panel will discuss the outcomes of the third International Conference on Financing for Development, which took place in Addis in July 2015, the implications for Africa and the role of African organisations.
Case studies from, among others, Burundi, Uganda, Nigeria, Kenya, Ghana, Morocco, Côte d’Ivoire, Sierra Leone, Malawi, Zimbabwe, South Africa, Zambia, Togo, Liberia, Zanzibar, Angola, Ethiopia and Tanzania, will also be discussed.
ATRN chairperson, Dr Nara Monkam, said that they had sought out high-quality submissions that further the knowledge and understanding of national, regional and international tax matters. Some of these papers will be discussed and debated at the conference.
ATRN was born out of the African Tax Administrators Forum (ATAF) and is the first African based network of academics and researchers that deals with tax policy, legislation and administration at an academic and policy discussion level.
ATRN’s board consists of academics and researchers from, among others, the University of Nairobi in Kenya, Stellenbosch University, the University of South Africa, the University of Bambey in Senegal, the University of Rouen in France, the National School of Statistics and Applied Economics in Abidjan (Côte d'Ivoire,) the National School of Administration and Magistracy in Benin, the Zimbabwe Revenue Authority and the Rwanda Tax Authority.
ATAF is the coordinating body for tax issues in Africa. It is a platform to promote mutual cooperation among tax administrations throughout Africa, and works towards developing state building and governance in Africa. ATAF is currently represented in about 40 countries throughout the continent.
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Raising Voices for Women Cross Border Traders in West Africa Project
The “Raising Voices for Women Cross Border Traders in West Africa Project” seeks to map women’s organisations in the ECOWAS sub-region and their potential to support the capacity building, advocacy and development of women cross border traders, through serving as platforms for the articulation of their challenges and aspirations.
In general, the project aims to make concrete information available to all stakeholders, including the ECOWAS, National Governments and Development Partners, for planning of further interventions to support women cross border trade in West Africa.
The women cross border traders of West Africa form a significant group of those involved in informal trade across the sub-region. Women cross border traders are not a homogenous group. They include a large group of small scale traders with little working capital, infrastructure and rudimentary numeracy/literacy skills.
The women traders are a paradox because in spite of their contributions to the regional and national GDPs of their respective countries, they have not been recognized for their economic contributions. Liberia has proven to be the only West African country that is favourably disposed to the women cross border traders.
While there are no policy frameworks that specifically focus on women cross border traders as a distinctive group, there are a number of supportive policy frameworks at all levels that can be leveraged to support them at the global (CEDAW/MDG3/Beijing Platform for Action), continental (AU Solemn Declaration on Gender Equality/Decade of the African Women/AU Gender Policy Action Plan/Protocol to the Charter on Human and People’s Rights on the Rights of Women in Africa), Regional (ECOWAS Gender Action Plan) and National levels (Gender Action Plans in Member States).
ECOWAS Commission has already commenced formal plans to engage with the women cross border traders by the development of a roadmap in 2013 at an expert’s meeting which was convened and a follow up meeting that considered the draft ECOWAS Plan on Gender and Trade in January 2015. These significant policy initiatives will attract technical resources and capacity building support from International organisations such as the International Trade Centre which is currently supporting the Uganda Export Promotion Council Program with women cross border traders.
Introduction
The Declaration on Intra-Regional Trade and the Continental Free Trade Zone by the Heads of State and Government of the African Union at their 18th Ordinary Session in Addis Ababa from 29-30 January 2012 states that enhanced African trade and deepening market integration can contribute significantly to economic growth, employment generation, poverty reduction, inflow of foreign direct investment, and better integration of the continent into the global economy.
The Heads of State and Government must have had the women cross border traders at the back of their minds while issuing the declaration. The women traders are the economic backbone of the West African sub region. Indeed, the bulk of these women are classified as informal traders or in the case of Ghana ‘head pan traders’, and they contribute significantly to regional integration and trade. They generate employment, ensure food security, and are responsible for poverty alleviation and livelihood.
In addition to their activities, these women traders are also able to see to their family needs including ensuring that their children are in school, have nutritious meals and access to medical care, through the use of the resources accruing to them.
In spite of the perseverance of the women traders, the Regional Trade Policy Environment has not taken this group into cognizance. Since they are mainly engaged in informal trade, their contribution to intra-regional trade in West Africa is under reported; thereby leading to constant harassment by border security officials (i.e. customs, immigration and joint border officials). The women also fall victim to theft, armed robbery, delated crossings at the border posts, and physical/sexual harassment among other things.
The findings of the Raising Voices for Women Cross Border Traders in West Africa Project (2014) during the Nigeria and Ghana review meetings confirm that not much has changed in respect of the treatment meted out to the women cross border traders in the West African sub region by border security agencies. Although significant strides have been made in highlighting the issues that concern the plight of the women traders and in attracting the attention of the policymakers at both the regional and national levels, the time has come for the women cross border traders to be integrated into the Regional Trade Policy Architecture in West Africa.
According to the World Bank Report titled pdf De-Fragmenting Africa: Deepening Regional Trade in Goods and Services (1.85 MB) , such cross border trade in essential for welfare and poverty reduction since poor people and especially women are intensively engaged in the production and trading of informal goods and services that are actually crossing African borders. Allowing these traders to flourish and gradually integrate into the formal economy will boost trade and the private sector base for future growth and development.
Also Dr. Obi Ezekwesili (former Vice President, World Bank) remarked that: “it is clear that Africa is not reaching its potential for regional trade, despite the fact that its benefits are enormous: they create larger markets, help countries diversify their economies, reduce costs, improve productivity, and help reduce poverty. Yet trade and non-trade barriers remain significant and fall most heavily and disproportionately on poor traders, most of whom are women.
“African leaders must now back aspiration with action and work together to align the policies, institutions, and investments needed to unblock these barriers and to create a dynamic regional market on a scale worthy of Africa’s one billion people and its roughly $2 trillion economy.”
As if to echo the perspectives of the World Bank Report as well as the statement of the former Vice President of the World Bank cited above, participants at the Nigeria and Ghana review meetings strongly recommended the establishment of a platform for organisations that will advocate for women cross border traders in the West African sub region.
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Report calls for overhaul in mining laws to include women
A new report on Women in Artisanal and Small-Scale Mining (ASM) in Africa has called for a policy overhaul in the mining sector for inclusive and active participation of women. The research project, a partnership between ECA and UN Women, aimed at contributing to the diversification of the mining sector in Africa to include women as a necessary for economic empowerment and social transformation.
Preliminary findings of the report, which includes case studies from Zambia, Tanzania, DRC, Ghana and Guinea-Conakry found that the legal and policy framework in the mining and extractive industries made it difficult for active participation and inclusion of women in those sectors. Access to affordable capital financing was the single most constraint for women miners says the report.
Speaking during a national review meeting in Lusaka, ECA Coordinator for Africa Centre for Gender, Thokozile Ruzvidzo said that the participation of women in the economic sector and specifically the extractive industries was central to Africa’s structural transformation. “There is interplay between gender equality and Africa’s structural transformation and ECA has identified women entrepreneurship in the agriculture and extractive industries as priority.”
In the Zambian case study, the report found little participation of women miners in the production and trade of gemstones at the international market “whilst gemstones produced in Zambia, in particular, emeralds and amethysts are widely traded in international markets, women miners are not making a significant contribution to the reported production of the gemstones” reads the report in part.
The report recommends the establishment of a clear policy direction for the ASM sub-sector. “In particular artisanal mineral rights should be positioned for progression into small and large scale mining.” The report further calls for change in the current 2-year term renewable artisanal mineral right which it says is not commercially sustainable because it “entrenches artisanal mining as a subsistence activity that poses a risk to both miners and the environment” says the report.
The report also recommends that government facilitates easier access to surface rights so that miners can increase opportunities to diversify mining with other agricultural activities. According to the report, most women miners were “absentee miners” conducting mining on part time and non residential basis. For most women miners, mining were seasonal, ad-hoc and not a primary source of income.
Ruzvidzo said that the research project was aimed at reviewing existing policy, legal and regulatory frameworks in the mining sector, to propose recommendations that integrate gender equality and equity in mining policies, laws, regulations, standards and codes in order to advance women’s economic participation and economic empowerment. The study also examines a wide range of potential financing mechanisms for small-scale mining operations with a view to up-scale them to commercially viability entities.
Background
The African mining landscape is dominated and profited by huge multinational corporations to the exclusion of majority of Africans particularly women and young people.
The launch of the AMDC in December 2013 in Mozambique was touted as a new page in the history and management the of the continent’s mineral wealth. The AMDC is mandated to implement the African Mining Vision which calls and foresees a mining sector that is safe, gender and ethnically inclusive, environmental friendly and socially responsible.
The two-day meeting held on 24th-25th August 2015 is part of a series of review meetings with stakeholders in above countries to discuss findings of the report. The Acting Permanent Secretary in the Ministry of Mines opened and participated in the meeting.
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AfDB unveils plan to empower African Women in Agriculture
The office of the Special Envoy on Gender (SEOG) and the Department for Agriculture and Agro-industry (OSAN) of the African Development Bank (AfDB) launched a new report, “Economic Empowerment of African Women through Equitable Participation in Agricultural Value Chains” on Thursday, August 27 at its headquarters in Abidjan, Côte d’Ivoire.
The event gathered high-level participants, including stakeholders from both the private and public sectors from the countries and sectors examined by the report – cocoa, coffee, cotton and cassava sectors in Côte d’Ivoire, Ethiopia, Burkina Faso and Nigeria, respectively.
“This report prepares the ground to empower women, to take a leading role in the business of farming and agricultural value chains, regionally and globally,” said Donald Kaberuka, President of the African Development Bank.
Agriculture in Africa is poised to remain one of the most important economic sectors, accounting for around 25% of the continent’s GDP. Over 60% of its citizens rely on agriculture for some form of income. To transform the sector, the economic empowerment of women through boosting their productivity and raising their participation in commercial and higher value-add activities in agriculture is central.
Women make up almost 50% of the agricultural labour force in Sub-Saharan Africa. A total of 62% of economically active women in Africa work in agriculture, making it the largest employer of women. In some countries, such as Rwanda, Malawi and Burkina Faso, over 90% of economically active women are involved in agriculture.
“African women feed the continent and they can feed the world, too. But we must close the wide gap in wages and agricultural yields between men and women if Africa is to achieve full economic transformation,” said Geraldine Fraser-Moleketi, the AfDB’s Special Envoy on Gender.
The report highlights five major constraints that can limit women’s productivity and full inclusion into the agricultural economy: lack of access to assets, lack of access to financing, limited training, gender-neutral government policy, and time constraints due to heavy domestic responsibilities.
The report highlighted three broad areas for action that could begin to address the specific constraints women face in each focus country:
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Grow the number of large-scale agribusiness entrepreneurs by providing access to financing and training, and improving regional and global market links.
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Make sure women are remunerated by setting them up as co-owners, improving productivity, and providing training in core business skills.
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Increase women’s access to niche markets by producing and marketing women-only products.
The role of women is largely limited to the unskilled parts of production: few own the land on which they work, they are rarely remunerated for their labour and often do not control the income generated from the sale of agricultural produce.
For example, in Côte d’Ivoire, the report estimates women account for 68% of the labour in cocoa production, but receive only 21% of the income. Similarly, in Ethiopia, women account for 75% of the labour in coffee production and receive only 34% of the income.
This report will help to identify areas that the African Development Bank (AfDB) and its partners could target to empower women economically through agriculture as the Bank implements its Gender Strategy (2014-2018).
Download
» Economic Empowerment of African Women through Equitable Participation in Agricultural Value Chains (10.71 MB)
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AGOA renewal raises African hopes of unhindered exports to U.S.
The suspense over the much-awaited decision on another 10-year extension of the African Growth and Opportunity Act (AGOA) – often called the United States’ General System of Preferences allowing duty-free imports – for African exporting nations is finally over with President Barack Obama recently signing into law the AGOA’s extension for an additional decade.
The AGOA bill was passed with overwhelming bipartisan support during a vote on June 11, 2015. But behind the scenes a cross-section of stakeholders – including African governments, the African Union, the African Diplomatic Corps and members of the U.S. and African private sectors – impressed upon U.S. lawmakers the significance of AGOA and its critical role in strengthening commercial and economic relations between the United States and the nations of Africa. President Obama, before his visit to Kenya and Ethiopia, said, “AGOA will be central to our efforts to boost the trade and investment that supports hundreds of thousands of jobs both in Africa and the United States, creating opportunities for all of us.”
Importers of African textiles and apparel at the TexWorld USA show in late July in New York City were pleased with AGOA’s renewal, which they said created a “win-win situation” for both the U.S. importers and sub-Saharan African shippers.
Mary Marino, the North American director of Cotton Made in Africa (CMiA), was enthusiastic about African exports of textiles and apparel. She expected cotton exports from Africa to grow following the AGOA’s renewal.
“We at the CMiA promote sustainable cotton which is different from organic cotton … we minimize the use of chemicals since Africa does not process cotton, it is sent abroad and then imported back into the country and re-exported to the markets,” Marino said.
CMiA, headquartered in Hamburg, Germany, and part of the Aid by Trade Foundation, promotes cotton produced in a number of countries, including Cameroon, Ethiopia, Ghana, Ivory Coast, Malawi, Mozambique, Tanzania, Uganda, Zambia and Zimbabwe.
The African continent represents 5 percent of global cotton production and more than 9 percent of the world’s cotton exports. Cotton is one of Africa’s most important cash crops, with more than 2.5 million livelihoods dependent on cotton production alone, thus underlining AGOA’s significance for textile and apparel production and, in effect, cotton production.
“Much of the cotton is produced in Africa by smallholders (farmers with less than one hectare of land). These farmers tend to achieve low yields and have a limited access to inputs such as water and pesticides. Quality has traditionally been seen as high throughout the continent, largely thanks to hand picking,” Marino explained.
A key operator called the East Africa Trade and Investment Hub (EATIH), a trade promotion agency based in Nairobi, Kenya, and funded by the U.S. government, has applauded AGOA’s extension. J.C. Mazingue, trade advisor for Africa and a contractor for USAID, said that AGOA would give African exporters duty-free access to 8,000 products, including almost all textile and apparel products.
AGOA, renewed until 2025, has a third-country provision that will give African exporters an added advantage: any fabric can be cut and sown free of U.S. duty. This will also motivate African companies to invest in capacity. Most African factories are doing well. Africa needs greater capacity, which means there is demand for African textile and apparel products in the U.S. The largest African exporter of apparel is Kenya, followed by Lesotho, Mauritius and Ethiopia. The government of Ethiopia has identified textile and apparel as a priority industry. Overseas companies, mainly from India, China and Turkey, have invested considerable sums of money in Ethiopia because of the much lower labor and energy costs. Ethiopia’s primary energy source is hydraulic derived.
According to Mazingue, “The East Africa region is becoming a de facto sourcing hub of the continent. Ethiopia, Kenya, Lesotho, Madagascar, Mauritius are well positioned.”
Ethiopia specializes in work wear, uniforms, basic knits, and more, Mazingue explained. Kenya is the leader in chinos, slacks, denim jeans; Lesotho is a big producer of denims; Madagascar has woven and knit shirts manufacturers; and Mauritius is increasingly becoming a destination for fashion and value-added products, he said.
Infrastructure is a pressing concern for companies deciding whether to source on the continent, and while each country comes with its own issues, Mazingue said, “Generally, energy costs need to go down, and transportation and logistics need to improve.
But Mazingue also spoke about the “strategic advantage” accruing to textile and apparel manufacturers in Africa because of the availability of the cotton crop. The so-called “African cotton belt” comprises countries such as Zimbabwe, Malawi, Ethiopia, Kenya, Egypt, and others.
“The medium range of cotton from Africa can compare to any good cotton from anywhere. Malawi cotton, for example, is good and comparable to other cotton-producing countries,” Mazingue added.
Cotton produced in Africa is a choice that the farmer has to make. There is currently, however, a significant stockpile of cotton in China. “China’s huge stockpile can create market convulsions and affect pricing,” he maintained. “Indeed, the textile industry in Africa has a good potential for growth because all African countries are keen to create jobs and this can be done through the textile industry,” he said.
To achieve the goal of creating jobs, African countries give incentives to potential investors in the form of energy consumption as is happening in Kenya while Ethiopia subsidizes certain areas to generate employment. But, trying to put “things in perspective,” he said that subsidies are given strictly on a case-by-case basis. “Textile and apparel account for 90 percent of exports from the sub-Sahara African region to the U.S. market,” Mazingue said. Indeed, the EATIH, which has facilitated substantial textiles and apparel exports from African countries, supports nine East African countries – Burundi, Ethiopia, Kenya, Madagascar, Mauritius, Rwanda, Seychelles, Tanzania and Uganda – increase their exports to the U.S. under the AGOA.
Buyers at TexWorld pointed out that AGOA-supported export company Mombasa Apparel had launched its fourth textile factory in November 2014 on the coast of Kenya. It produces apparel destined for the U.S. through AGOA. Mombasa Apparel is one of the country’s largest employers, with some 10,000 workers in its four factories in the Mombasa region. According to one textile Kenyan exporter, who insisted on remaining anonymous, the company plans to have a fifth factory online by the close of this year, with the capital investment for the fourth and fifth factories amounting to $25 million.
However, not all African countries have been able to make any substantial headway in terms of increasing their textile and apparel exports following the AGOA renewal. Kenya, Lesotho and Mauritius provide the bulk of apparel exports under the program. In 2014, Kenya exported $423 million worth of apparel to the United States under AGOA; Lesotho, $289 million; Mauritius, $227 million; and Swaziland, $77 million. Experts have urged Ghana, which has not substantially increased its exports of textiles and apparel, to examine why these countries have been so successful in utilizing the preference program.
According to a report by management consulting firm McKinsey, Ethiopia and Kenya, particularly, have the potential to become bigger players in garment manufacturing. Some European companies, including H&M, Primark and Tesco, have been sourcing their garment needs from Ethiopia, but other countries have also been supplying substantial quantities of apparel. Ethiopia and Kenya, and to a lesser extent Uganda and Tanzania, are proving to be of interest to apparel buyers. The Ethiopian and Kenyan governments are taking steps to develop their domestic textile and garment industries.
Both Ethiopia and Kenya have strengths and weaknesses. Ethiopia has cost advantages whereas Kenya boasts higher production efficiency. But both countries face challenges such as poor infrastructure, cumbersome customs processes, a dearth of technical and managerial talent, and low levels of social and environmental compliance.
Apparel production, unlike textile production, typically requires low-skilled labor and minimal capital expenditures, allowing the producing countries to become globally competitive.
Africa’s textile and apparel exports to the U.S. could quadruple to $4 billion over the next decade through the AGOA extension, creating 500,000 new jobs, as Gail Strickler, assistant United States trade representative for textiles and apparel, said prior to the act’s renewal.
Last year, U.S. clothing imports from sub-Saharan countries reached $986 million, up nearly six percent over 2013. Analysts highlight the advantages that Africa offers in terms of lower labor costs and abundant raw materials, including cotton; however, congested ports, a poor road network, lack of skills and old technology are obstacles that need to be addressed.
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tralac’s Daily News selection: 27 August 2015
The selection: Thursday, 27 August
Starting today, in Luanda: African Caucus of finance ministers, central bank governors
The African Caucus Meeting is meant to seek a common ground among the continental financial institutions on relevant matters in their relation with Bretton Woods institutions. The subjects that stand out on the agenda in the six panels are the General Vision of the Regional Economy, Economic Transformation and Diversification, Discussion on the 2015 African Caucus Memorandum and the Financing of Regional Projects connected to infrastructure.
Services trade and African integration: presentation by William Davis (UNECA)
Extract from policy recommendations: Liberalisation of trade in services can help African businesses to benefit from each other’s expertise and increase their competitiveness. But liberalization not always good. Which policies are successful seem to vary by sector. Forthcoming ECA-AUC research on infrastructure services examines hundreds of different policies. [Access other, new postings from the CFTA training workshop on trade in services negotiations]
Why regional payment systems are assuming greater importance (NewsDay)
Africa’s regional payment systems, such as Siress, are expected to play a growing role in the continent’s economic growth story, particularly as intra-African trade picks up. These payment systems are set to be both beneficiaries and drivers of Africa’s economic growth. Underlying growth in trade volumes will create demand for more advanced cross-border facilities and services. “Without a functioning payment system, the vision of increased intra-regional trade will not materialise. It’s a fundamental prerequisite,” Hugo Smit, head of sub-Saharan Africa for Swift says.
Regional integration arrangements in Africa: is large membership the way forward? (Brookings)
Is the attempt at rationalizing the multiple regional integration arrangements (RIAs) across the continent a milestone towards greater cooperation across the continent? Drawing on observations and analysis of the recent experience, I argue that, in spite of the unfavourable geography that makes it difficult to deal with the high costs of heterogeneity, integration initiatives in small member groups will produce the highest benefits. [The author: Jaime de Melo]
2015 AGOA FORUM: selected updates, below
Remarks by Ambassador Michael Froman
In the coming days, let’s stretch our thinking and our ambitions to match this historic extension. We need to make sure AGOA’s potential is fully explored and its benefits fully utilized. That will require work on both sides of the AGOA equation. Our African partners will need to design strategies to take full advantage of AGOA’s tariff preferences, and the United States will need to work to make sure we are providing the trade capacity building and other assistance necessary to support those strategies. But we also need to start thinking about our long-term, trade and investment relationship today, just as the theme of this summit encourages. We do not come to the table with a predetermined outcome in mind, but rather with the perspective that we need to start a dialogue about the emerging opportunities and challenges that will shape the global economy during the next decade, and how we might best navigate this fast-changing landscape together.
SA car export boom sharpens AGOA focus (Business Day)
On Wednesday, Mr Davies was at pains to stress that SA had made "tremendous progress in addressing issues that were raised by the US and, therefore, our country continues to adhere to the Agoa eligibility requirements". "On June 24 2015, the Cabinet took a decision to lift a trade restriction on cattle and products of bovine origin from countries that previously reported bovine spongiform encephalopathy, including the US. Minister Zokwana has written to his US counterpart, secretary Tom Vilsack, on August 6, to announce that SA has lifted trade restrictions on cattle and products of bovine origin from the US," said Mr Davies.
Willemien Viljoen: 'Any progress on the permanent extension of South Africa’s AGOA preferences?' (tralac)
African countries urged to intensify education on AGOA to reap benefits (Ghana Business News)
Trade pacts to curb poaching in Africa, US official says (VOA)
USDA selects ASA’s WISHH to develop West African poultry and feed market (KMAland)
Sub-Saharan Africa, in 2015 Global Agenda for Economic Freedom (Heritage)
Barriers on agricultural produce killing African economies, says Foreign CS (Daily Nation)
A better agreement on agricultural exports will be Kenya’s priority when the world converges in Nairobi for the WTO summit this December. In a meeting with Swedish investors on Tuesday, Kenya’s Foreign Affairs Cabinet Secretary Amina Mohamed argued that the world should adopt better agreements on agricultural produce to aid African economies that depend on it. “African countries’ investments in agriculture have been sinking in a huge black hole, because these legitimate investments cannot compete with distorting subsidies derived from the current Agreement on Agriculture regime,” she said in Stockholm where she is on official visit, according to a statement.
Africa urges Indian businesses to invest in the continent, not just sell (LiveMint)
In a rare move, the envoys of several African nations have criticized Indian entrepreneurs for looking at the continent merely as a vast export market and source of raw materials, urging a rethink of business strategy with a focus on long-term investments in Africa. At a business meeting organized in New Delhi by the India-Africa Chambers of Commerce and Industry in New Delhi on Wednesday, the envoys called on Indian businessmen to be present in Africa and utilize opportunities that they would otherwise lose to their Chinese and European counterparts.
Do EPAs with the European Union benefit developing countries? (Antillean)
Therefore, let it be fully understood; the EPA is not just an agreement with the European Union - it is an agreement with the world. [The author, Ronald Sanders, is Antigua and Barbuda Ambassador to the US]
East Africa - China trade routes fastest growing (IHS)
Trade routes from China to Africa are expected to see a marked increase over the next five years, with the highest growth expected to be seen from the East African to China route, incorporating Malawi, Mozambique, Zambia, and Zimbabwe. “Trade between East Africa and China is expected to increase by 91 percent by 2020,” Atkinson said. “It’s all around manufactured goods. East Africa is becoming a new hub for the Chinese.”
What impact could the 21st Century Maritime Silk Road have on South Africa? (SAIIA)
4th China-Africa People's Forum: update (AU)
FOCAC VI: background and 2015 focus priorities (SAIIA)
Standardization in improving market (The Ethiopian Herald)
According to Demitu Hambisa [Ethiopia's Minister of Science and Technology], one of the challenges African countries are facing is market access in the globalized world. The quality of products and services that they provide should conform to the requirements of the consumers. This implies that companies and service organizations should have sufficient capacity, skilled manpower and appropriate systems to produce goods and services to the required standards. However, most African countries do not have such capacity to make immediate advantage of new trade opportunities; that is to say, due to lack of value addition and diversification in their commodities, they have less probability to be sold in feasible price in the world market.
TRA, freight forwarders to form joint committee (IPPMedia)
In a move to improve and strengthen freight forwarders services in the country, Tanzania Revenue Authority in collaboration with Tanzania Freight Forwarders Association are working to establish a special committee to work on challenges facing the industry.
Uhuru bid to revive Lake Victoria transport seen boosting trade (Business Daily)
Kisumu has received a major boost in its bid to become a regional transport hub after President Uhuru Kenyatta pledged to revive its port in fresh efforts to expand trade with East African neighbours. The port handles mainly Uganda-bound cargo. The plan to revive the facility comes in the wake of a sugar import deal with Uganda which has caused a political storm in Kenya. As part of the Kisumu Port revival plan, the government will prioritise reopening the collapsed Kisumu Cotton Mills and Miwani Sugar Factory.
Swazi government yet to approach Mozambique on shipping port's cross country canal (Club of Mozambique)
There are multiple problems with this scenario. First, no point on the coast is a mere 26 kilometres from Mlawula. As the crow flies, the nearest point on the Mozambican coast is over 70 kilometres from the site of the proposed port. Furthermore, as anyone who has driven from Maputo to Swaziland can testify, the land rises steeply. Canals are fine for transporting goods over flat terrain – but if there are hills in the way, locks must be built, dramatically increasing the costs. Building a canal with a system of locks capable of holding ocean-going vessels would be a massive engineering undertaking. Such an operation is also entirely unnecessary. Swaziland’s main trading partner is South Africa.
Zambia: ZCTU advises govt to be firm over taxes, refuse blackmail (The Post)
In his reflections after attending a Botswana conference on illicit financial flows in Africa, ZCTU deputy general secretary for finance and administration Misheck Nyambose said politics should not come into play when people call for a fair share of the country’s mineral wealth. “Look at the tax regime in the mines today; we were very happy with the initial position of increasing the taxes for the mines to get the best out of it on behalf of Zambians. Unfortunately, politics came into play and the good measures that the government had put up were attacked and there was a lot of blackmail from the multinationals. Our encouragement to the government is that they must remain firm when they come up with measures that protect the interests of Zambians."
Zimbabwe: Unplanned food imports drain fiscus, says VP (The Herald)
Unplanned food import expenditure is a major drain on the fiscus especially when the economy is experiencing challenges, Vice President Emmerson Mnangagwa has said. Officiating at the 3rd annual agro-business conference hosted by the National Economic Consultative Forum at the Harare Agricultural Show yesterday, Cde Mnangagwa said there was need to reduce imports especially on products that could be produced locally. “Maize and small grains production during the season decreased by 9% and 71% respectively. As a result government is working closely with development partners to import grain. These unplanned expenditures on food imports are a major drain on the fiscus and they further worsen our balance of payment position already negatively affected by imports of fuel and manufactured products that are not produced within our borders.”
Kenya: Treasury targets public debt cut to 45% GDP (Business Daily)
The Treasury intends to cut the public debt level to about 45% of the gross domestic product in the next few years, down from the current level of 51.5%. Domestic debt stands at Sh1.4 trillion while foreign one is at Sh1.3 trillion, making a total of Sh2.7 trillion. At a go, the Treasury increased the public debt by Sh283 billion ($2.75 billion) when it raised money last year through a sovereign bond. The debt has risen in the past one year due to the spending on infrastructure, especially the standard gauge railway in which the government is providing more than Sh100 billion besides the Sh330 billion loaned by the Chinese government.
ILO, partners empower people risking HIV infection along transport corridors (IPPMedia)
Salomao: Global financial crisis has delayed regional integration (Club of Mozambique)
'Not SADC’s place to reject Mswati' (IOL)
SA logistics firm negotiating to buy 30pc in Kuehn+Nagel, Kenya (Business Daily)
The 7th edition of trade fair of Chinese products in West Africa kicks off in Benin (Xinhua)
Zimbabwe: No need to import cooking oil – CZI (NewsDay)
ECOWAS healthcare forum (The Nation)
Ethiopia first country to launch ClimDev-Africa Special Fund project (AfDB)
47th ASEAN Economic Ministers’ Meeting: statement
ASEAN to ‘upgrade’ trade deals with Japan, China and South Korea by year’s end (Japan Times)
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Remarks by Ambassador Michael Froman at the Opening Ceremony of the 2015 AGOA Forum
Remarks by U.S. Trade Representative Michael Froman at the Opening Ceremony of the 2015 U.S.-Sub-Saharan Africa Trade and Economic Cooperation Forum (AGOA Forum) in Libreville, Gabon, 26 August 2015
AGOA at Fifteen: Charting a Course for a Sustainable U.S.-Africa Trade and Investment Partnership
Good morning.
Your Excellency, President Bongo Ondimba, Honorable Minister Tchango, esteemed members of the Gabonese Government, Ministers and Heads of Delegations from the 39 AGOA partner countries, my U.S. Government colleagues, and private sector and civil society leaders:
If I may borrow a phrase I learned here in Africa: All protocol observed.
It’s a pleasure to be among so many friends of AGOA.
And of course, some of AGOA’s best friends are the Members of Congress and Congressional staff who have travelled to be here with us at the Forum. For a number of these members, this is their second trip to Africa in as many months, having accompanied President Obama on his historic fourth visit to Africa as President just a month ago. As the President said during that trip, ‘Africa is on the move.’ There’s no question our friends in Congress intend to keep up. Thanks to their leadership, and bipartisan support of large majorities in both houses of the U.S. Congress, as well as the tireless efforts of the African diplomatic corps, and stakeholders in the private sector and civil society, we secured a 10-year renewal of a new and improved AGOA, the longest extension in the program’s history.
In the coming days, let’s stretch our thinking and our ambitions to match this historic extension. We need to make sure AGOA’s potential is fully explored and its benefits fully utilized. That will require work on both sides of the AGOA equation. Our African partners will need to design strategies to take full advantage of AGOA’s tariff preferences, and the United States will need to work to make sure we are providing the trade capacity building and other assistance necessary to support those strategies. But we also need to start thinking about our long-term, trade and investment relationship today, just as the theme of this summit encourages. We do not come to the table with a predetermined outcome in mind, but rather with the perspective that we need to start a dialogue about the emerging opportunities and challenges that will shape the global economy during the next decade, and how we might best navigate this fast-changing landscape together.
But before we delve into the work at hand, let’s pause for a minute to consider how Africa has exceeded expectations. Ten years ago, many thought sub-Saharan Africa would become less important to the global economy. Today, sub-Saharan Africa is among the fastest-growing regions in the world. Many thought the IT revolution would skip Africa. In 2003, Safricom, Kenyan’s leading mobile provider, was planning for 500,000 customers by 2013. They ended up with 21 million. Some put forward grim predictions for health and demographic trends that failed to account for medical innovations and the ingenuity of public-private initiatives. So as we think about the future, let’s remember that Africa has a habit of exceeding expectations.
Looking forward, Africa’s opportunities challenge the imagination. Over the next five years, sub-Saharan Africa’s GDP is forecasted to grow 30 percent faster than the rest of the world. By the World Bank’s estimate, sub-Saharan Africa is home to 413 million children under the age of 15 – nearly as many as the 431 million children in the developed world and China combined. A generation from now, the region will be home to almost a quarter of the world’s workforce. According to the UN, sub-Saharan Africa’s urban population is expected to grow from 360 million to 1.18 billion by 2050, surpassing the urban population of the entire developed world. These demographic trends could be accompanied by greater productivity, demand, and investment, underscoring how important Africa will be to the entire world economy. But they also present new challenges for meeting rising needs.
During the next decade, the march of technology will continue to expand the bounds of what’s possible, including how we trade and what we trade. By 2025, Africa’s internet penetration is expected to climb from 26 percent to over 50 percent, and there will be 360 million smartphones on the continent – roughly twice as many as there are in the United States today. Greater connectivity could mean greater access to essential services, from education, to medicine, to credit and savings accounts. While much of the developed world is locked into investments in older infrastructure, these and other technological trends, especially in energy, provide an opportunity for African countries to leap ahead and adopt more efficient and sustainable solutions. To do so, however, will require strategic investments, strong public-private cooperation, and an abundance of political will.
Africa is already actively deepening and expanding its trade and investment relationships, taking steps to establish the Tri Partite and African Continental Free Trade Area (CFTA) and shifting to more permanent and reciprocal trade arrangements with some of its developed country trading partners. Looking forward, it’s possible to imagine Africa as one large market, from Cape Town to Cairo and Libreville to Port Louis.
As Africa continues rising during the next decade, the rest of the world will not stand still. The United States is already moving forward with next-generation trade agreements that will raise standards across both the Asia Pacific and the Atlantic and could have positive spillovers here in Africa. For example, the Trans-Pacific Partnership will help combat illegal wildlife trafficking, including the illegal trade of ivory from Africa. That will complement some very successful efforts here in Gabon, where effective enforcement has actually reversed rampant elephant poaching and population decline in the Wonga-Wongue Reserve, which I had the pleasure of visiting yesterday. In addition to the environment, we are working to set higher standards across the board – on transparency, good governance, and anti-corruption; on good regulatory practices; and on basic worker rights – all of which are critical, long-term drivers of sustainable, inclusive development. And as more economies join TPP over time, we hope to contribute to rising global standards as well.
Where does Africa fit into this picture? The United States is not new to Africa. We’ve been involved here for decades, not as a colonial power, but as a partner – one focused not just on extracting resources from the continent, but investing in human resources in the continent. Every region, every country is different, with its own set of challenges and its own legacy, but we must not underestimate what this vibrant continent is truly capable of accomplishing.
History shows that it’s a mistake to bet against Africa, and the progress we’ve made together through AGOA encourages us to aim even higher. Doing so will surely require a more comprehensive approach, one which recognizes that tariff preferences alone are not sufficient and addresses the supply-side constraints facing Africa today. To be productive, Africa needs affordable, reliable electricity. To successfully integrate into global supply chains, Africa needs the capacity to meet international standards. To be competitive, Africa needs to match the efficiencies of Asian and Latin American ports with effective trade facilitation policies. And that’s why our approach is to situate AGOA in the context of a broader development strategy that includes Trade Africa, Power Africa, Feed the Future, the Global Health Initiative, MCC compacts, USAID assistance, World Bank and African Development Bank investments and other programs that can support Africa’s own priorities and help build the continent’s capacity to trade competitively in the 21st century global economy.
Our development strategy recognizes the centrality of economic growth to poverty alleviation. It is based on the conclusion that to achieve sustainable growth, we need trade, not just aid; investment, not just assistance. But it is also based on the conviction that growth by itself is not sufficient. The quality of that growth matters as well if we are going to see the powerful linkage between expanding trade and alleviating poverty continue. That requires that the benefits of growth be broadly shared. By 2022, it is estimated that the world’s middle class will surpass the number of people living in poverty. The strength of our economic partnership will play a critical part in determining whether that trend continues and whether, working together, we can end extreme poverty and, indeed, confine poverty to the dustbin of history.
Let me be the first to admit that we don’t have all the answers for the path that we should chart to achieve these goals, but I hope that over the coming days we can begin asking the right questions and identifying the contours of a deeper and more sustainable, post-AGOA, U.S.-Africa trade and investment partnership.
Thank you.
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Finance ministers, central bank governors attend African Caucus in Luanda
From 27-28 August in Luanda, the Republic of Angola will host the Meeting of the Ministers of Finance and Governors of the Central African Banks, the African Caucus, with the aim of strengthening the voice of the continent’s representatives on important issues relating to the socio-economic development of the Bretton Woods Institutions (BWIs).
The African Caucus Meeting is meant to seek a common ground among the continental financial institutions on relevant matters in their relation with Bretton Woods institutions.
The meeting is an opportunity for African financial institutions to put forward, in a concerted and organised way, the most relevant problems affecting the economies of the continent, particularly concerning the construction of infrastructure and industrialisation of the productive processes.
The meeting being held at the Talatona Convention Centre is an important opportunity for the African leaders, represented by their Ministers of Finance and Planning and Governors of the Central Banks, to jointly present in a coordinated and organised way the major and current concerns affecting the economies of the African continent, namely the building of infrastructure and industrialisation of production processes.
The subjects that stand out on the agenda in the six panels are the General Vision of the Regional Economy, Economic Transformation and Diversification, Discussion on the 2015 African Caucus Memorandum and the Financing of Regional Projects connected to infrastructure.
Personalities like the Ex-President of South Africa, Thabo Mbeki, and other individuals connected to the New Partnership for Africa’s Development (NEPAD), the World Bank (WB) and the African Development Bank (AFDB) have been invited to speak on the topics above.
Hosting the African Caucus in Angola will provide an opportunity for the country to strengthen its relationship with the international financial institutions like the International Monetary Fund, the World Bank and the African Development Bank, and thus seek to marshal aids required for its development.
According to a Finance Ministry’s press release that reached Angop on Wednesday, the event will also contribute to a better visibility of Angola and new opportunities for the diversification of its economy.
Angola was formally appointed to chair the African Caucus Group in 2015, during a meeting held in Khartoum, Sudan, from 3-4 September 2014.
Founded in 1963 as the African Group of Governors of the World Bank Group and the IMF, the Caucus aims to strengthen the voice of the Governors of the African Continent on important issues relating to the socio-economic development of the African Region, within the Bretton Woods Institutions (World Bank and International Monetary Fund).
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Training of African Union Services Trade Negotiators kicks off in Nairobi
A week-long workshop, convened by UNCTAD and the African Union Commission, is underway to train services trade negotiators from Anglophone African countries on related negotiations under the African Continental Free Trade Area (CFTA).
The training is part of follow-up measures being undertaken by the African Union Commission AUC, in collaboration with UNCTAD, to enhance the understanding and negotiation skills of African services trade negotiators in preparation for negotiations that would take place subsequent to the June 2015 AU Summit decision to launch negotiations on the establishment of an African Continental Free Trade Area (CFTA), which are expected to be concluded in 2017.
The 50-plus participants include services trade negotiators from 19 African countries and 4 African Regional Economic Communities, as well as representatives from UNCTAD, the AUC, the UN Economic Commission for Africa (UN-ECA), the World Trade Organization (WTO), the UN Food and Agriculture Organization (FAO), the Trade Law Centre for Southern Africa (TRALAC), International Lawyers and Economists Against Poverty (ILEAP) and other independent experts.
Ms. Amina Mohamed, Cabinet Secretary, Ministry of Foreign Affairs and International Trade of Kenya opened the Workshop, with a statement delivered on her behalf by Ms. Joyce Ogundo, Director of Internal Trade of the same Ministry.
Ms. Mohamed stated that Kenya believes in the importance of trade in services, as highlighted in the recent UNCTAD report on “Unlocking the potential of Africa’s services trade for growth and development”.
She stressed that “Services are key for enhancing the competitiveness of African economies” as exemplified in the case of Kenya’s mobile-phone based money transfer and micro-financing service (M-PESA).
Ms. Treasure Maphanga, Director, Department of Trade and Industry, of the AUC, said that the African continent is serious about moving forward on the CFTA, as made evident by the launching of the negotiations on the CFTA by the June 2015 AU Summit.
She added that the negotiation guidelines adopted by members provide for the negotiations of trade in goods and trade in services concurrently to establish a CFTA in goods and services. The negotiations will build upon existing efforts in African regional economic communities, taking into account relations with the WTO and external partners.
Ms. Maphanga stressed the importance of the workshop in preparing African services trade negotiators, and announced that a second workshop for AU Francophone countries would be held in Benin in October.
Ms. Maria-Thereae Keating, UNDP Country Director and UN Resident Representative (a.i.), said that the UN believes that economic development is a key driver of poverty reduction and that international trade is a major vector of such transformation. The UN is thus committed to supporting African countries in realizing the CFTA, including in terms of services economy and development, which can have stronger developmental results.
Mr. Bonapas Onguglo, Senior Affairs Officer, UNCTAD, reiterated that services are needed to boost competitiveness in all other sectors in the economy. UNCTAD’s comprehensive work on services reflects this.
The workshop will enhance awareness and understanding of services economy issues by African services negotiators and also bolster their negotiations skills through practical exercises and simulations.
» Quick link: Training Workshop on Trade in Services Negotiations for African Union Continental Free Trade Area Negotiators
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Ethiopia first country to launch ClimDev-Africa Special Fund project
The ClimDev Africa Special Fund (CDSF) launched its first project in Ethiopia on August 3 to help the country cope with, and build resilience to, climate change by enhancing capacity in climate monitoring, data analysis, interpretation, forecasting and dissemination for use in national decision-making.
The project entitled “Strengthening Climate Information and Early Warning Systems for Climate Resilient Development and Adaptation to Climate Change in Ethiopia – (SCI-EWS)” will be implemented over a span of three years at a total cost of EUR 1 million.
Speaking at the launch, Ato Alemayehu Tegenu, Ethiopia’s Minister of Water, Irrigation and Energy, noted that, “Enhancing the capacity of the country’s National Meteorology Agency by promoting strategies that effectively manage risks; reduce vulnerability; and maximize opportunities associated with climate variability, change and extreme weather events for different socioeconomic sectors, is central to our commitment to build a fully climate resilient green economy by 2025.” Improved service delivery and cost recovery systems as a result of the project, are expected to generate additional income for the Government to ensure the future sustainability of the system together with the National Meteorological Agency.
Justus Kabyemera, AfDB ClimDev-Africa Special Fund Coordinator further stated, “This project exemplifies the importance of the ClimDev-Africa Special Fund to help mitigate the challenges associated with gathering and relaying important climate-related information on the continent – a critical step to help countries deal with climate change-related risk. In countries such as Ethiopia, in which climate change is not only recognized as a real threat, but as an opportunity as well, working towards sustainable adaptation and mitigation will help it achieve rapid economic development by promoting safe agricultural investments and boosting industrial growth.”
In addition to Ethiopia’s Minister of Water, Irrigation and Energy and staff, the launch was also attended by representatives from the Ministry of Finance and Economic Development, the African Union Commission, the United Nations Economic Commission for Africa, the African Development Bank (AfDB), ClimDev-Africa, and non-governmental organizations.
Following the launch, relevant National Meteorological Agency staff attended a three-day workshop on AfDB project implementation rules and procedures, such as procurement and monitoring and evaluation.
Ethiopia is the first country to benefit from the Fund.
About ClimDev-Africa Special Fund
Launched in November 2014, the ClimDev Africa Special Fund (CDSF) is the funding arm of ClimDev Africa, a joint programme between the African Union Commission, the United Nations Economic Commission for Africa and the African Development Bank. Housed at the AfDB, it is a demand-led fund that pools resources to finance investment activities on the ground across Africa for the generation and use of climate information for climate-resilient development. Grants are provided to projects in line with the ClimDev-Africa Programme’s goal, purpose and results areas and are implemented by national and regional organizations at all levels on the continent.
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Barriers on agricultural produce killing African economies, says Foreign CS
A better agreement on agricultural exports will be Kenya’s priority when the world converges in Nairobi for the World Trade Organisation (WTO) summit this December.
In a meeting with Swedish investors on Tuesday, Kenya’s Foreign Affairs Cabinet Secretary Amina Mohamed argued that the world should adopt better agreements on agricultural produce to aid African economies that depend on it.
“African countries’ investments in agriculture have been sinking in a huge black hole, because these legitimate investments cannot compete with distorting subsidies derived from the current Agreement on Agriculture regime,” she said in Stockholm where she is on official visit, according to a statement.
She told the gathering that African countries were unable to lift their economies because of too many impediments placed on agricultural produce from the continent
But she hopes this can be rectified during the next WTO meeting. About 4,000 delegates from 160 countries are expected in Nairobi in December for the 10th WTO meeting (C10).
Formally known as the WTO Ministerial Conference, it is a biennial summit held since 1995 when the World Trade Organisation was established.
WTO is generally a forum where countries negotiate trade agreements and settle disputes resulting from international trade.
It officially has five functions of administering trade agreements, acting as a forum for trade negotiations, monitoring national trade policies, providing technical assistance to developing countries and acting as a link with other international organisations.
Despite its promise to level the trading field, critics have accused the Organisation of passing policies that favour developed countries.
For example, some critics have said rich countries within the WTO maintain high import duties on products thus discouraging exports from poor countries.
Then there are non-tariff barriers such as the insistence on age of goods as well as safety of agricultural products which poor countries are unable to meet.
Besides, there are agreements that limit how far poor countries can use certain technology.
On Tuesday, Ms Mohamed told Swedish investors that the gap can be bridged if they can invest in Kenya and other African countries.
“For us to benefit more from international trade, our exports must increasingly shift from raw materials to processed products through higher value addition,” she said after meeting with Ms Isabela Lövin, the Swedish Minister for International Development Cooperation.
In 2014, Kenya exported Sh2.8 billion worth of goods to Sweden.
These were mainly in the form of horticultural produce. Sweden on the other hand sold to Kenya goods worth Sh6.3 billion in the same year.
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Uhuru bid to revive L. Victoria transport seen boosting trade
Kisumu has received a major boost in its bid to become a regional transport hub after President Uhuru Kenyatta pledged to revive its port in fresh efforts to expand trade with East African neighbours.
President Kenyatta divulged the finer details of the plan to a section of the lakeside town’s leaders at the Kisumu State Lodge on August 14, the last day of the National Music Festival.
Governor Jack Ranguma, Kisumu Central MP Ken Obura and his Kisumu East counterpart Shakeel Shabbir attended the meeting with Mr Kenyatta.
Lake Victoria basin leaders have been pushing for re-routing of cross-border trade through the port as well as the dry dock formerly run by Kenya Railways.
Mr Kenyatta said Kenya was banking on the ease of transporting commodities through the port to grow GDP.
The move will reduce the cost of transporting goods by road. The President said that reviving Kisumu Port will be prioritised for Kenya to grow more business with its East African Community trade partners.
The port handles mainly Uganda-bound cargo. The plan to revive the facility comes in the wake of a sugar import deal with Uganda which has caused a political storm in Kenya. As part of the Kisumu Port revival plan, the government will prioritise reopening the collapsed Kisumu Cotton Mills and Miwani Sugar Factory.
Mr Kenyatta exuded confidence in the region as a destination for business tourism.
In this regard, he announced that the next Northern Corridor Summit will be held in Kisumu. The meeting will deliberate on how to make the lakeside town a commercial hub for EAC member states.
“Kisumu will be developed into commercial headquarters of the East African Community member states,” President Kenyatta said when he addressed residents on Oginga Odinga Street after closing the two-week music festival. He said Kisumu’s location was strategic for reaching markets in Rwanda, Uganda and Tanzania.
“The standard gauge railway will pass through Kisumu port to ease transport of goods to Uganda and beyond; this is an opportunity that you must prepare to reap from,” said Mr Kenyatta.
Governor Jack Ranguma told the Business Daily that the meeting focused on how to instal more enablers in Kisumu to facilitate trade and transform the economy of the region. He said that they also agreed to work towards attaining a charter for Kisumu City, which will raise its status as a tourism destination.
They agreed to work on a raft of issues to be addressed by the national government which will also boost devolution in the long run, he said.
“We want the president to bring a Cabinet meeting here as he had promised. We will use the opportunity to tackle development issues that need to be jointly executed by the national and county governments,” said Mr Ranguma.
The governor said that setting up water sports and ship cruises will transform Kisumu Port and attract more tourists.
He said that they had also asked for more ships to be introduced in the lake to connect Kisumu with neighbouring countries. The leaders also plan to revive dead industries as a means of dealing with unemployment. These undertakings will eventually raise investor confidence in Kisumu, he said.
“We have beautiful hills, an international airport and a lake port that can make us earn from the goldmine that Kisumu is. It is time to work towards growing this area for business,” MP Obura said.
Mr Shabbir said Kisumu will be an enviable trade destination if the issues discussed in the meeting are implemented.
“We must push for them to come to pass. Here are riches that have not been exploited while our youth wallow in poverty.” The leaders spoke even as the town has become increasingly popular as a host of national events.
Mr Amin Vipul, a transport consultant, said that once the standard gauge railway reaches Kisumu it will serve as a cheaper link of Kenya and its neighbours through Mwanza port in Tanzania and Jinja in Uganda.
“We laud the government for being keen on increasing trade volumes within EAC member states. Trade has been limited by the low carrying capacity of Kenyan roads. It is not too late to revive Lake Victoria routes and make them more active,” said Mr Vipul.
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tralac’s Daily News selection: 26 August 2015
The selection: Wednesday, 26 August
Opposites attract? Bringing the trade and regulatory communities together (ICTSD)
Where does all this take me? The WTO, its valiant efforts in the TBT/SPS context notwithstanding, has found it difficult to emerge as the forum for regulatory cooperation. The impossibility to conclude one agreement on this front following the enactment of the TBT and SPS Agreements is the best proof to this effect. Unless it does so though, it risks seeing its relevance diminished in a world where regulation (almost) exclusively nowadays segments markets. What could be done? Here is an inventory of proposals: [The author: Petros C. Mavroidis]
Africa’s inter-trade improving but digitalization of customs procedures lags behind (UNECA)
During his keynote address at the 1st African Union Forum on Trade Facilitation for Customs Experts that was held in Congo, Brazzaville on 19-21 August 2015, Mr. Luke reported on the findings of a 2015 ECA survey, highlighting that “while no evidence of resistance to the utilization of Information and Communications Technology was found, African countries are however prioritizing institutional reforms and putting physical infrastructure in place”. Mr Luke stressed that “Africa needs good trade facilitation policies and good operational measures”.
Monitoring for Environment and Security in Africa Forum (AU)
Kenya will host the first Monitoring for Environment and Security in Africa (MESA) Forum in Nairobi from 31st August – 4th September. The Forum will examine how Earth Observation data through the MESA Project supports policy, planning and decision making at the national, regional and continental level in Africa. Commissioner for Rural Economy and Agriculture of the African Union Commission, H.E. Tumusiime Rhoda Peace, said: “By enhancing access to and exploitation of relevant Earth Observation applications at continental, regional and national levels, the MESA Project (http://mesa.au.int) contributes to the increase of information management, decision-making and planning capacity of African institutions mandated for agriculture, environment, climate, fisheries, food security and related responsibilities. This is critical for African regional integration”
Presentations posted: training workshop on trade in services negotiations for African Union Continental Free Trade Area negotiators
Africa’s squandered commodity boom erodes US trade promise (Reuters)
A fresh US trade pact could provide relief to African economies buffeted by the commodities slump but a failure to reform during the boom years has left many countries unable to profit from tariff-free access to the world’s largest market. Those countries which aim to benefit from AGOA, such as Ethiopia and Kenya, are not dependent on oil or mining, giving them an incentive to diversify into areas such as footwear and textiles exports. Ethiopia is positioning itself to become a manufacturing hub, driven in part by investments from China and India as labour costs in their own backyards rise. By contrast, big resource producers from bauxite miner Guinea to oil-exporter Nigeria failed to channel vast capital flows into diversification.
Africa, spurning America, fled into China’s arms. Now US may hold 'cure' to the continent’s fast-dipping economy (M&G Africa)
Ernesto Zedillo: 'Africa at a fork in the road: taking off or disappointment once again?' (VOX)
Ethiopia: Industry ministry seeks new strategy for cotton development (Addis Fortune)
The UK government is funding a 15-year cotton strategy for Ethiopia with intent to have a new institutional arrangement for cotton development. This was announced by the Ministry of Industry in an international bid to hire consultants using money availed by the Department for International Development. The decision to develop a strategy followed an agreement that the Cotton Development Directorate at the Ethiopian Textile Industry Development Institute was no longer enough to administer cotton development, calling for a higher structure, according to Bante Kasse, director of CDD. The problems, which are said to be above the CDD, are, rising demand, complexity of the increasing number of textile industries and supply value chain. Currently, a total of 136 textile and garment factories, at medium and higher scale are fully operational, while 10 more factories expected to join the industry “in the first phase of the GTP II.”
Arkebe Oqubay: 'Industrial policy in Ethiopia' (OUPblog)
The Ethiopian experience shows that learning by doing is just as important in policymaking as in production. Ethiopia has been making bold experiments, based on looking at what works and what does not. With each experiment and experience, policymaking capacity gradually improves. There is no short-cut alternative to learning-by-doing. The key question for many countries is whether they can experiment in the absence of policy independence? [The author is a minister, special advisor to the Ethiopian prime minister]
Mzwandile Masina: 'Navigating slow demand with radical restructuring' (IOL)
The issue is the historic position of the South African economy in the global production network. It was integrated into the global production value chain as, like most colonial economies, a supplier of raw minerals without domestic beneficiation. This meant that our growth derived from fetching increasing market prices for our minerals. As soon as the global economy drifted towards a financial collapse in the US and Europe, demand for these minerals took a dip and thus began a process of growth and jobs haemorrhaging locally. It is this structural integration of the South African economy that defines our ‘victimisation’ by the global markets. [The author is South Africa’s Deputy Minister of Trade and Industry]
SA's Gross Domestic Product, 2nd Quarter (StatsSA)
AGOA: South Africa remains closed to US poultry, pork and beef imports (USDA)
Since last reported in GAIN, South Africa has not finalized issues related to its concerns over the trade measures that stop exports of U.S. poultry, beef, and pork. Since the June 4-5, 2015, Paris meetings that resulted in the draft agreement between the USSA poultry industries on a quota, USDA and DAFF have met three times and not yet resolved the sanitary issues.
First East African Manufacturing Business Summit: a preview (Arusha Times)
Angola’s Lobito Corridor: diversification and development, or “white elephants”? (CMI)
This report analyses progress in developing transport infrastructure in this Lobito Corridor. What has been achieved? What are the main remaining challenges? Will this corridor become an engine for economic diversification and social and economic development? Will these investments in transport also lead to development for poor and vulnerable people living in the corridor? Or will this new infrastructure end up as a “white elephant” that slowly degenerates as result of poor management and insufficient maintenance? [The authors: Ana Duarte, Fernando Pacheco, Regina Santos, Elling N. Tjønneland]
China Road ships in 10 locomotives for laying SGR track (Business Daily)
China Road and Bridge Corporation is set to ship in 10 locomotives next month to be used in laying the track of the Standard Gauge Railway. “So far, the earthworks for the SGR project have been completed by over 50%. The bridges are at about 48%,” Mr Li said. “By the middle of next year, the earthworks for the entire project will be fully competed.”
Zimbabwe in port construction talks (The Herald)
Government is engaging potential developers of a multi-billion-dollar project which will link Zimbabwe to a port north of Beira in Mozambique in a bid to significantly reduce distance and cost of moving goods between the two countries. Transport and Infrastructure Development Minister Dr Obert Mpofu told The Herald Business in an interview that government is currently studying detailed proposals submitted by the potential developers and is “seriously engaging potential promoters of the project”.
Mozambique aims to establish special economic zones for agriculture (MacauHub)
Mozambique has identified 24 development poles with potential for the creation of special economic zones (SEZs) for agriculture, with a view to promoting investment and increasing farm production, the minister for Agriculture and Food Safety said. The 24 development poles are:
Namibia: Aquaculture master plan unveiled (New Era)
The Ministry of Fisheries and Marine Resources yesterday launched the National Aqua Culture Master Plan which aims to raise freshwater aquaculture output to 4 000 tonnes a year by 2023. The ministry is also striving to increase marine aquaculture production from 525 to 5 500 tonnes by 2023 and to ensure aquaculture provides food, income and employment for rural and urban communities.
Zimbabwe Special Permit briefing by Minister Gigaba (GCIS)
The ZSP process had ensured, since inception, in 2009, some degree of reduced pressure on the asylum system with Zimbabweans stay in the country regulated by way of these special permits. For us finding a viable option effectively to deal with ‘economic migrants’ will go a long way in enhancing South Africa’s management of international migration, in the national interest, and in keeping with the dictates of international law. It is this consideration informing further the ensuing review of our international migration policy. What SA needs is a modern, progressive and robust policy on international migration which will take into account the enormous current and potential contribution of immigrants to our society, and our connectedness with the rest of the world, while minimising associated risks and protecting our national interests.
Angola: IMF staff complete 2015 Article IV mission (IMF)
“The government’s timely reaction to the decline in oil prices by revising the 2015 budget will allow the central government deficit to fall to 3½ percent of GDP, compared to 6½% last year. Public debt, however, is projected to increase significantly to around 57% of GDP, of which 14% of GDP corresponds to Sonangol, by end-2015. The 2016 budget should be predicated on a conservative oil price assumption and be aimed at protecting expenditures on social assistance and critical infrastructure while preserving fiscal discipline given that a recovery in oil prices in the near term is unlikely. It will be critical to bring the public sector wage bill, as a share of GDP, more in line with the new revenue reality of the budget.
East Africa: TradeMark hires former WTO boss Lamy for logistics job (Business Daily)
The Nairobi-headquartered TradeMark East Africa has hired former World Trade Organisation secretary-general Pascal Lamy among high-profile individuals to deliver an ambitious logistics target for the region this year. Mr Lamy joins the new board of TMEA headed by board chairman of Infotech Investment Group (Tanzania) Ali Mufuruki with members that include Acumen Fund’s regional CEO Duncan Onyango, former Kenya Private Sector Alliance chairman Patrick Obath and President of the Federation of East African Freight Forwarders Association Merian Sebunya. Other new TMEA directors are Rosette Chantal Rugamba, Patricia Ithau, CEO of Econet Wireless (Burundi), Anthony Masozera, Earl Gast and Jacqueline Busingye Lutaya.
How EA port with best facilities will win race for regional hub status (Business Daily)
Economies of large scale translate to lower cost of transportation per container. The expected major beneficiary of the bigger ships calling East African ports will be the consumer. In the mainline trades Europe to Asia, depending on the season, container freight can sometimes be as low as $100 from Europe to Asia. Ports in East Africa should expect more cascades of the bigger container ships being handed down as they get displaced in their traditional routes. An adequate preparation to take full advantage of the effects of cascading is a wise port decision. [The author: Silvester Kututa]
Longest ship to dock at Dar port expected today (IPPMedia)
East African Legislative Assembly passes EAC Culture and Creative Industries Bill
EAC tops 2015 Brookings financial inclusion scorecard (New Times)
Jaindi Kisero: 'Privatisation of sugar firms not the answer; barons will gobble them up' (Daily Nation)
Carl Bildt: 'Development's digital divide' (New Times)
Senior UN climate change official envisages ‘good agreement’ at upcoming Pairs conference (UN News Centre)
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Africa’s inter-trade improving but digitalization of customs procedures lags behind
“Most African countries have made a great deal of progress in general trade facilitation reforms but overall progress in the area of digitalization or paperless trade facilitation is more limited,” said Mr. David Luke, the coordinator of the African Trade Policy Centre at the Economic Commission for Africa.
During his keynote address at the 1st African Union Forum on Trade Facilitation for Customs Experts that was held in Congo, Brazzaville on 19-21 August 2015, Mr. Luke reported on the findings of a 2015 ECA survey, highlighting that “while no evidence of resistance to the utilization of Information and Communications Technology (ICT) was found, African countries are however prioritizing institutional reforms and putting physical infrastructure in place”.
Mr. Luke stressed that “Africa needs good trade facilitation policies and good operational measures”. The survey identified a lack of infrastructure, such as risk-management technology and scanners, and the incapacity of authorized operators such as freight carriers for fulfilling various procedural requirements. It also categorised financing constraints for institutional support, equipment, as another challenge, followed by insufficient coordination between government agencies and effective political oversight.
This first ever trade facilitation forum for customs experts is very timely, considering that the negotiations for the Continental Free Trade Area (CFTA) were officially launched in June 2015. Mr. Luke pointed out that trade facilitation and the removal of non-tariff barriers will be critical for the success of the CFTA in boosting intra-African trade.
Despite encouraging progress in formalities such basic customs and other border facilitation reforms, there remains much to be done to enhance trade facilitation in Africa, reported Mr. Luke to the forum of customs experts from 30 African countries as well as officials from international agencies including the UN Conference on Trade and Development, World Trade Organization, World Customs Organization and the International Trade Centre.
African states are encouraged to improve procedures for cross-border trading because reforms to customs procedures deliver the most benefits in terms of reducing trade costs. Upgrading transport infrastructure was the next most effective reform, followed by other border agency reforms.
The ECA survey, distributed to African government officials including customs officials, regional economic institutions, transport corridor management agencies, private sector operatives, academia and development partners, also showed that some of the measures needed to fix the problems do not require much resources other than a systematic approach to institutional and procedural reform
To overcome some of the challenges, Mr. Luke indicated, “regular consultations with the private sector were found to help to maintain momentum for policy and institutional reform.” He reminded delegates that regional economic institutions and corridor management institutions have a key role to play in setting regional standards and best practices.
“Given that resource constraints are an important challenge to implementing trade facilitation measures, it seems important to focus scarce resources on implementing those trade facilitation measures that are likely to have the greatest impact. Trade facilitation and investments in infrastructure cannot be separated; improved investment in hard infrastructure is a prerequisite for trade facilitation to succeed.”
Another obstacle to the implementation of trade facilitation measures, such as harmonised documents and regulations, was a lack of coordination between agencies rendering an uneven implementation across countries.
Though infrastructure, customs and border procedures stand out as major challenges for African countries to fully realising their trade potential, progress has been made, said Mr. Luke.
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Africa’s squandered commodity boom erodes U.S. trade promise
A fresh U.S. trade pact could provide relief to African economies buffeted by the commodities slump but a failure to reform during the boom years has left many countries unable to profit from tariff-free access to the world’s largest market.
In an effort to boost trade under the African Growth and Opportunity Act (AGOA), renewed by Congress for a decade in June, representatives from 39 African countries will hold talks with U.S. officials in oil-rich Gabon this week.
Under the deal, first signed in 2000, African exports to the United States rose to $26.8 billion by 2013, but more than four-fifths of that was oil.
With U.S. demand for petroleum imports falling due to its shale revolution and commodities prices across the board hit by China’s slowdown, the blow to African economies has highlighted their failure to industrialize.
The World Bank forecasts GDP growth in sub-Saharan will slow this year to 4.2 percent, down from an average of 6.4 percent during 2002 to 2008.
Despite a decade of rapid growth, sub-Saharan Africa’s manufacturing sector remained weak. While exports from the region more than quadrupled to $457 billion in the decade to 2011, manufactured goods made up just $58 billion of that.
U.S. officials say that, even with tariff-free access, a range of problems are holding back African exports, from poor transport links to costly electricity, lack of bank credit, corruption and labyrinthine bureaucracy.
“When you look at a container of coffee or textiles coming out of Africa, it is substantially more expensive and less competitive than the same container coming out of parts of Latin America,” said U.S. trade representative Michael Froman.
“One of the lessons of the first 15 years of AGOA is that tariff preferences, while important, are still not enough.”
Those countries which aim to benefit from AGOA, such as Ethiopia and Kenya, are not dependent on oil or mining, giving them an incentive to diversify into areas such as footwear and textiles exports.
Ethiopia is positioning itself to become a manufacturing hub, driven in part by investments from China and India as labour costs in their own backyards rise.
By contrast, big resource producers from bauxite miner Guinea to oil-exporter Nigeria failed to channel vast capital flows into diversification. In many cases, currencies inflated by these flows made other exports less competitive – the so-called “Dutch Disease”.
“Every major economy in Africa that did well out of the extractive industries over the past decade has failed to industrialize,” said Ricardo Soares de Oliveira, who teaches African politics at Oxford University.
A tale of two special economic zones
Africa’s No. 2 crude producer Angola is a classic example of a “petro state” with no political will to diversify as elites profited from a deluge of oil revenues. A 2011 IMF report found $32 billion in government revenue could not be accounted for between 2007 and 2010.
Soares de Oliveira said that, while Angolan authorities paid lip service to diversification and set up a Special Economic Zone outside Luanda, the initiative was held back by a chronic lack of electricity, graft, and reliance on expensive foreign inputs.
“While it generated billions in contracts for insiders and their foreign partners, no meaningful industrialization occurred,” he said.
By contrast, Kenya’s plans to use Special Economic Zones to industrialize appear to be more successful as it focuses on cutting taxes and regulatory hurdles, according to Thalma Corbett, head of research at NKC African Economics.
According to NKC data, manufactured goods already accounted for around 20 percent of Kenyan exports in 2014.
Corbett said Kenya’s government was targeting labour -intensive, low-technology industries such as textiles and leather to take advantage of AGOA.
U.S. data shows that textiles and apparel sales from Kenya and Lesotho have already jumped under the scheme from $359 million in 2001 to $991 million in 2014.
Froman said that Kenya and its partners in the East African Community were pushing ahead with reforms to make exports more competitive, including simplifying and computerizing customs requirements in the five-nation bloc.
Too reliant on resources
Washington hopes that the 10-year renewal of AGOA, rather than the usual three, will give investors the clarity needed to make long-term investment decisions such as building factories. Froman expressed hope that cotton-exporting nations like Mali and Burkina Faso could become textile exporters.
The reduction in commodities exports and souring sentiment has led to sharp falls in most African currencies this year, with even South Africa’s rand hitting a record low of 14/dlr on Tuesday.
Although it is the most industrialized economy on the continent, even in South Africa commodities accounted for about 57 percent of its exports last year.
Yet South Africa is one of AGOA’s success stories with automotive exports booming from $289 million in 2001 to $1.4 billion in 2014, and could benefit further from the exchange rate.
Other, less developed economies may struggle to do so. At a trade fair to promote the AGOA pact, the secretary general of the Gabonese employers confederation bemoaned the country’s lack of goods manufactured to U.S. standards.
“To be able to talk of trade, you need to produce,” said Roland Desire Aba’h. “I do not know of a single product presented at this exhibition which can compete in trade relations between the Gabon and the USA.”
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SA seek remedies for struggling steel sector
Business, government and labour have come together to discuss the hike of import duties on steel imports. These efforts are to protect the struggling steel sector.
Government had agreed to advance the process of tariff approval, showing its support for a local steel sector hit by cheap imports, muted local demand and stalled large-scale infrastructure projects. Major steel producers and labour unions revealed during a joint press briefing that the proposed tariff hike would, however, include a demand that the industry not raise the price of steel to “unaffordable” levels.
This emerged after Friday’s meeting which saw a government delegation led by Trade and Industry Minister Rob Davies and Economic Development Minister Ebrahim Patel who met with representatives from business and labour on challenges faced in the iron and domestic steel industry.
The meeting was attended by Solidarity, the National Union of Metalworkers of South Africa (Numsa), Uasa, the Metal and Electrical Workers Union of South Africa, steelmakers AMSA, Evraz Highveld Steel & Vanadium, Cape Gate, Scaw, Macsteel Coil Processing and industry body the Steel and Engineering Industries Federation of Southern Africa (Seifsa.)
Engineering News reported that several processes were currently under way, including several International Trade Administration Commission of South Africa (Itac) investigations that had been instituted following the submission of applications for protection on a range of steel products. It is understood that Itac deliberations on the first few applications are at an advanced stage and that a determination should be delivered soon to the relevant ministers for final approval.
Major steel players hardest hit by the depressed industry were Evraz Highveld Steel & Vanadium, which earlier this year filed for business rescue and had since warned of impending job cuts, as well as AMSA and Scaw, both of which were considering restructuring options that could result in the loss of jobs.
In particular, government has called on business to reduce job losses and on both parties to build strong workplace partnerships. Government also indicated its support for the designation of the local steel industry, agreeing to the establishment – through the Department of Public Enterprises – of a committee to investigate how State-owned companies could enhance their procurement support for the local sector. Steel companies Cape Gate and Scaw further committed to providing the DED with evidence of what they argue is Itac’s noncompliance with an agreement relating to the ban on the export of scrap metal.
The DED, in a statement, committed that measures would be taken to address the surge in the export of scrap metal, which it claimed undermined the domestic industry and “compromised national goals,” according to Engineering News.
The parties would, meanwhile continue to work together towards solutions aimed at avoiding sweeping retrenchments, with government indicating that it would investigate how the DTI’s Training Lay-off Scheme could be used more effectively to avoid “imminent” retrenchments.
Joint statement by Labour and Business on government outcomes
Last week Friday, 21 August 2015, a watershed meeting took place between labour; business and government behind closed doors in Pretoria.
Organised by Numsa, this meeting was a shared initiative of labour, business and the steel industry associations, an attempt to put the brakes on the looming job loss bloodbath in the primary steel and related industries.
The labour delegation was led by Numsa General Secretary Irvin Jim and included the leadership of Solidarity, Uasa – the Union and Mewusa. The business delegation was led by the CEO of ArcelorMittal (AMSA), Paul O’Flaherty and included the CEOs of Evraz Highveld Steel, Cape Gate, The Scaw Metals Group and Macsteel Coil Processing.
Seifsa’s President, Ufikile Khumalo, led the industry associations, while government’s delegation was led by Minister’s Rob Davies and Ebrahim Patel and included senior government officials from Public Enterprises; Trade and Industry; Transport and National Treasury. Transnet leadership was also in attendance.
The meeting was necessitated by a clear agenda of seeking government’s firm commitment to reassess their policies which are contributing to sweeping away jobs in the steel industry.
The meeting was significant in relation to the fact that we had approached government with one voice, irrespective of our differences.
Together, labour, business and the steel industry associations concluded a joint 10-page submission to government in which we sketched out our collective call for government to urgently address the current crisis in the steel industry, failing which we will be faced with a disastrous and devastating impact on our economy.
The effects of which will be acutely felt by workers employed within the industry, the families they support and the many communities who rely on the industry for their livelihoods.
Our submission provided carefully researched information on the significant role played by the steel industry in the South African economy in particular the industry’s’ contribution in sustaining other industries of which the top 5 (automotive, mining, construction, energy, and infrastructure) contributes 15% to our country’s GDP annually. We explained how the top 5 industries employ more than 8 million workers, contributing some R600 billion to our economy annually.
We pointed out that steelmaking accounts for approximately 190, 000 jobs directly and a further 100, 000 jobs through suppliers. We demonstrated that the steel industry is a core employer in Vanderbijlpark, Saldanha, Newcastle, Germiston, eMalahleni and Nkandla districts, with 75% of households in Vanderbijlpark and Newcastle and 25% of those in Saldanha being dependent on the local steel industry for their livelihood. Among these and many more facts on the centrality of steel to our economy, we emphasised that all of these were at stake in the next 6 months to a year if not urgently addressed.
While as labour and business we have our own issues and demands, we managed to agree on 10 core collective demands in our submission to government.
In brief these were:
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Immediate trade remedies for steel
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Designation of steel for local government infrastructure spend
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Urgent rollout of government’s infrastructure programmes
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Transparency of current State Owned Enterprises (SoEs) capital programmes
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Fair pricing for steel versus Import Price Parity (IPP)
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Monitoring of imports
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Urgent advancement of government’s beneficiation strategy
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Banning of steel scrap exports
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Delaying the implementation of Carbon Tax
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Establishing a steel crisis committee
The meeting with government afforded us the opportunity to share our submission on the key challenges facing this ailing sector, as well as our intervention proposals to save the industry from total collapse.
Government, through the Departments of Trade and Industry (DTI) and Economic Development (EDD) provided us with the work and initiatives underway on their end.
As government, business and labour we agreed that an urgent solution to the current crisis in the steel industry was required and further agreed that any solutions found should not negatively affect jobs in the downstream manufacturing industries.
While government recognised the challenges confronting the industry and indicated a clear willingness to support initiatives aimed at saving the industry, it pointed to the need to be mindful of ensuring that any interventions are not in breach of necessary regulations.
At the same time government expressed its recognition of the slow speed in processing remedies. To address this government committed to setting up a joint DTI and EDD committee to explore the expedition of legal, regulatory agreements required to protect the industry from job losses.
The representatives from government present also indicated that they could not speak to the demands impacting on government Ministries not represented at the meeting.
In express relation to our demands and through our engagements with government, we have delivered the following partial victories;
A. On trade remedies:
Government indicated that they are happy to proceed with our demands, specifically:
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The first application for tariffs at 10% of the WTO bound rate will be signed off next week with conditions which are not yet finalised, but which will include a demand for industry not to raise the price of steel to unaffordable levels.
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The rest of tariff applications will be pushed through ITAC without prejudicing the process.
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AMSA will submit their first of 5 anti-dumping applications by the end of August 2015 and the rest as soon as possible thereafter.
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AMSA will investigate with DTI and EDD what other avenues are available to fast track anti-dumping measures, e.g. “provisional” anti-dumping, safeguard duties etc.
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Further, government committed to looking at any other avenues to ensure protection of the industry.
B. On designation of steel, localisation and government infrastructure programmes:
Government indicated its commitment to support for the local steel industry through designation and localisation in this regard:
- A group will be set up through the Department of Public Enterprises to look at how localisation could be created with SoEs. Transnet committed to meet on their 1,000km p.a. rail upgrades.
C. On the banning of export of scrap metal:
- Cape Gate and Scaw Metals will provide EDD with evidence as to where ITAC is not following the agreed directive and is allowing export permits as part of working towards the ban on the export of scrap metals.
D. On the training lay-off scheme:
Government indicated that it would support processes more expeditiously if industry committed to alternatives, particularly training lay off schemes, rather than proceeding with retrenchments. In this regard:
- Government will facilitate the process of establishing a government, labour and business task team on the training lay off scheme, particularly to address the bureaucratic processes around the available scheme and to see how this could be used effectively for avoiding the imminent retrenchments.
E. On section 189 / retrenchments:
- Business and labour would continue to work for solutions regarding the S189s already issued and the impending ones. Processes being followed by individual companies to find solutions will continue.
F. Steel crisis committee
- While we would not set up a separate steel crisis committee the team that met on the 21 August will meet again in 3 to 4 weeks’ time to assess progress on agreements reached and plan further.
These partial gains we have secured will be shared with our individual constituencies, as we continue to navigate solutions to avert the imminent job loss bloodbath.
While working together, as labour, we will continue planning our campaign actions focusing on issues that we feel employers must do to avert retrenchments at all costs. We remain firm that no worker deserves to be retrenched, amidst the triple crisis of poverty, unemployment and inequality, ravaging working class and poor households in South Africa today.
We will continue to engage with employers in various levels to stop job losses in this sector. Where we feel that retrenchments are unjustifiable we will be forced to remain true to our trade union fighting approach of “what has not been won in the boardroom, shall be won on the streets”, through embarking on actions and demonstrations to exert much needed pressure from below.
Lastly, as labour, we want to thank the CEOs and SEIFSA, for embarking on this noble journey with us to save this strategic sector of our economy from collapse. This journey has called on all of us to take collective action to avoid jobs being shed. We hope business will go back and rethink their decisions in the interest of our members and society at large.
We too thank government for their commitments in this regard and hope that they act as expeditiously as committed to in our meeting on Friday.
Source: NUMSA
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Minister Davies arrives in Gabon for AGOA Forum
The Minister of Trade and Industry, Dr Rob Davies has arrived in Libreville‚ Gabon‚ to attend the 14th African Growth and Opportunity Act (AGOA) Forum that is taking place from 24-27 August 2015. The Forum is being held under the theme “AGOA at 15: Charting for a sustainable US-Africa Trade and Investment Partnership”.
The Forum is an annual event held on a rotating basis between the United States and Sub-Saharan African (SSA) countries. The 13th AGOA Forum was hosted by the US in Washington in 2014.
The African Growth and Opportunity Act (AGOA), is a unilateral preferential programme for about 6400 tariff lines including those provided by Generalised System of Preference (GSP) that the US offers to 38 African sub-Saharan countries. The current AGOA was going to expire at the end of September 2015 and the congress recently voted for the continuation of the programme for another 15 years with South Africa included as a beneficiary country. However, the new AGOA Act called for out-of-cycle review of the eligibility of South Africa to receive the benefits under AGOA.
Minister Davies says South Africa has made tremendous progress in addressing issues of concerns that were raised by the US and therefore our country continues to adhere to the AGOA eligibility requirements.
Various initiatives have been taken towards resolving market access issues relating to Beef, Pork and Poultry.
“On 24 June 2015, Cabinet took a decision to lift a trade restriction on cattle and products of bovine origin from countries that previously reported Bovine Spongiform Encephalopathy (BSE), including the US. Minister Zokwana has written to his US counterpart, Secretary Tom Vilsack on 06 August 2015, to announce that South Africa has lifted trade restrictions on cattle and products of bovine origin from the US,” says Minister Davies.
On pork issue, the Minister says the Animal Health Authorities of both governments have been undertaking the necessary technical work to ensure safe trade from at least three diseases, namely, Trichinella, Porcine Reproductive & Respiratory Syndrome (PRRS) and Aujesky.
“The two countries made good progress on certificates on pork destined for unrestricted sale and for further processing. South Africa agreed that a significant number of recognizable pork cuts were categorized as low risk and were now accepted for unrestricted sale conditions. In short, South Africa has made significant progress, and continues to make progress on addressing the market access interests and regulatory concerns of the US on beef, chicken and pork through an agreed framework and existing channels of communication with the United States,” states Minister Davies.
Davies will also have bilateral meetings with the United States Trade Representative Ambassador Michael Froman, US Congressional delegations, and the Under Secretary for Economic Growth, Energy and the Environment Cathy Novelli.
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Industry Ministry seeks new strategy for cotton dev’t
Though the industry is expanding 45,000qt of cotton was imported last fiscal year
The UK government is funding a 15-year cotton strategy for Ethiopia with intent to have a new institutional arrangement for cotton development.
This was announced by the Ministry of Industry in an international bid to hire consultants using money availed by the Department for International Development (DfID).
The decision to develop a strategy followed an agreement that the Cotton Development Directorate (CDD) at the Ethiopian Textile Industry Development Institute (ETIDI) was no longer enough to administer cotton development, calling for a higher structure, according to Bante Kasse, director of CDD. The problems, which are said to be above the CDD, are, rising demand, complexity of the increasing number of textile industries and supply value chain.
Currently, a total of 136 textile and garment factories, at medium and higher scale are fully operational, while 10 more factories expected to join the industry “in the first phase of the GTP II.”
The winning consultant for the strategy will recommend an “institutional arrangement that can best drive the highly anticipated cotton sector”.
DfID will allocate all the money that will be required at the final awarding of the contract on September 4, 2015, said Ahmed Nuru, director of Policy & Programme Studies, Monitoring & Evaluation at MoI. The closing date for offers from bidders was August 21, 2015 and the final strategy document is expected to be ready by January 2016.
CDD, which could be closed by the recommendation of the strategy yet to be developed, is itself a very young entity, established in 2014 within ministry of agriculture (MoA). It was later re-established as part of the ETIDI.
In 2013/14 Ethiopia produced 35,000tn of cotton on 60,000ha of land. A year later, 60,000tn was produced on 100,000ha, although the increased national demand had varied from 90,000tn to 100,000tn a year.
The expectation for 2015/16 was around 100,000tn, although the rainfall delay and shortage has now cast doubt on the attainment of that target, Bante said. The CDD will send a team this week to make an assessment in the north and south western parts of Ethiopia, based on which it will re-estimate the expected harvest.
In terms of filling gaps in demand and supply the country has been importing cotton; in the last fiscal year only, 45,000qt of cotton was imported by Ethiopian Industrial Inputs Development Enterprise (EIIDE).
The new strategy will make recommendations for increased domestic production that will reduce and eliminate reliance on imports, Ahmed says.
It will set new standards for cotton and is expected to devise a way out to overcome price fluctuation on the global market and its unforeseen impact on Ethiopian cotton growers said Ahmed.
According to the Terms of Reference for the consultants, the winning candidate is expected to assess the experiences of other African countries with genetically modified cotton and opportunities for its production.
During the first Growth and Transformation Plan (GTP I), implemented from 2009/10 to 2014/15, Ethiopia collected 456 million dollars in revenue from the textile industry. That was way below the planned one billion dollar target, as indicated in the GTP I performance report. Problems in quality and quantity of inputs [cotton], as well as gaps in the value chain of input production, were listed as causes of the aforementioned under performance.
MoI is currently receiving bids from international consultants, which will be evaluated by a technical committee from MoA, MoI, the textile institute and the directorate. Technical and financial proposals will be evaluated on the basis of 70pc to 30pc, respectively.
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Africa, spurning America, fled into China’s arms. Now US may hold ‘cure’ to the continent’s fast-dipping economy
The pointed talking-up of China as an alternative to the West has been trendy in an Africa dazzled by Beijing’s flashing overtures, reminiscent of a man planning to abandon his wife of donkey’s years for a new found love.
It has been a whirlwind relationship – bilateral trade has exploded in the last decade to an estimated $222 billion last year (thrice that with the US), while more than a quarter of sub-Saharan Africa’s exports head for the belly of the dragon.
The US has in recent years sought to remind Africa of when the vows mattered, with its first ever US-Africa leaders’ summit last year leading to the “homecoming” of president Barack Obama last month.
And as the markets have shown this year, sometimes it pays not to spurn completely, with the US poised to send a signal to traders which could have a significant impact on a broader African economy reeling from events largely outside its control.
China’s sudden devaluation of its currency this month spooked investors, causing a global market rout that also seen the value of African assets plunge following a sharply reduced appetite for emerging market risk.
African currencies are taking a pummelling, with half of the world’s worst performing currencies on Monday coming from the region, according to financial data company Bloomberg. This builds on a losing streak that has left central banks around the continent to watch gloomily the weak outcome of their aggressive monetary policy tightening actions.
There have been a few contrarians – Botswana early this month reduced its benchmark lending rate, but the southern African country also simultaneously pared back economic growth forecasts for this year by nearly half.
South Africa’s currency this week reached a record low against the US dollar, joining countries like Zambia, Nigeria, Ghana and Angola that have seen their local units depreciate to uncharted lows.
As investors flee for safety anywhere they can find it, yields on Eurobonds have soared to record highs, a compete turn in direction from just months ago when they were healthily oversubscribed by investors enthused by the prospect of handsome returns.
Bourses have not been spared either – Nigeria’s main stock market index shed nearly 9% in July, while South Africa’s and Mauritius’ remained largely flat, according to data from the African Securities Exchanges Association.
With commodities at a 16-year low, Africa exporters have borne the brunt, but the currency losses have seen even importers like Uganda and Kenya see hoped for gains evaporate.
“The oil importing countries should have at least been resilient,” Samir Gadio, head of Africa strategy at UK-headquartered Standard Chartered Plc, said. “But it seems that everything is selling off.”
With seemingly no end in sight to the volatility, emerging markets have been driven almost to despair, highlighting just how integrated financial markets are, and leaving smaller players like Africa at their mercy. But help may come from unlikely quarters, or if you think about it, one that has always been there.
Analysts say African markets could rally again if the US Federal Reserve delays a much-anticipated decision to raise its funds rate for the first time in years, a move that could come as early as next month. But given the market storms raging all around, the US regulator could decide to stay its hand, as it seeks to keep its finger on the global market pulse. It could be much like a stay of execution for developing countries because risk-weary investors may not penalise them just yet.
But the signs that it would be a tough year for Africa have been apparent for months, as a Chinese economy running out of steam cut back on its previously voracious demands for the continent’s raw materials. This has led to the increasingly frantic attempts by Beijing to jumpstart its economy.
In addition to devaluing its currency, the country’s central bank on Tuesday reduced its one-year lending rate for the fifth time in less than a year, in addition to cutting the amount on money it expects Chinese banks to set aside for the third time this year, helping to momentarily stem the week-long global market haemorrhage.
The turmoil has caught up with African economies, which are now queuing up to cut previously bullish forecasts on economic growth. It will not be surprising if the International Monetary Fund (IMF) further cuts growth forecasts for the region from the current 4.5%, from last year’s projection of 5%. The World Bank in June cut the region’s growth forecast to 4.2%.
Uganda has this week said its economic growth in the year to June 2016 could fall to 5% from an initial 5.8% forecast, after its central bank raised interest rates to combat a weaker currency. Four increases of the country’s main interest rate this year have failed to prop up the shilling, which has fallen by a quarter against the dollar this year.
The country follows in the path of Botswana which last week cut its 2015 growth forecast by nearly half, as demand for its mainstay diamonds weakened. It now expects to see expansion at 2.6%, from a February projection of 4.9%, the finance minister said. Diamonds account for more than 70% of Botswana’s export revenue.
The country also expects to post a budget deficit of 4 billion pula ($394 million), compared to an earlier expected surplus of 1.2 billion, as civil service sector wages rose, and a drought continues to ravage the region.
In South Africa, data released on Tuesday showed that the economy had pulled back in the third quarter, on the back of a steeply-falling currency, crippling load shedding, and slumping commodity prices, fuelling fears of a recession.
Nigeria’s second quarter growth has come in at 2.35%, down from 3.96% last year, as the oil price crash hit home, one of a raft of bad news for Africa’s largest economy.
Struggling Zimbabwe has also halved growth forecasts from 3.2% to 1.5%, with Finance minister Patrick Chinamasa last month blaming drought and a slowdown in its key mining industry. But the crunch has been enough for president Robert Mugabe to wave the white flag, admitting that western re-engagement in his country’s economy after 15 years in which the veteran daily denounced the west, was vital.
In June, Zambia Finance minister Alexander Chikwanda cut his country’s growth forecast for this year to 5.8% from a projected 7%, as its fiscal deficit ballooned from the targeted 8.5 billion kwacha to reach 20 billion kwacha ($2.5 billion) last month.
It could get even worse for the southern African nation, as drought continues to bite – levels at its Lake Kariba dam are down to their lowest levels in decades, hurting electricity production and mining, a sector that the slow-growing China is a major player in.
Neighbouring Democratic Republic of Congo, Africa’s largest producer of copper and cobalt, has also revised down its growth projections to 9.2% from 10.3% last month, blaming falling metal prices and power shortages.
Sierra Leone’s recent trimming of revenue target is linked to lowered production of iron ore, mainly as investors fled over an outbreak of Ebola, though it would still have struggled to get good prices for the ore in a depressed commodities market.
It expects its economy to contract 2% this year, from growth of 4% last year. In 2013, the post-conflict country had clocked in as sub-Saharan Africa’s fastest growing economy.
Tanzania has also reported depressed first quarter growth – 6.5% compared to 8.5% last year, as mining, a key contributor of foreign exchange, fell 18 percentage points to 0.6% in the three-month period to March. The IMF has also trimmed growth forecasts for Kenya from 6.9% to a still-healthy 6.5%, but did not offer explicit reasons.
With the real prospect that its economy, which has been riding on a tailwind of Chinese trade and investment, could decrease if the Asian economy does not pick up, it may be time for Africa to reassure old partners that it did not really mean to remove the fly on its forehead by using a machete.
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Senior UN climate change official envisages ‘good agreement’ at upcoming Pairs conference
The climate change agreement world leaders are expected to sign in December “has to take us to a less than 2 degree global warming path because that is the ultimate test of the whole package that will come out of Paris,” according to Janos Pasztor, a senior United Nations official dealing with the issue.
“Our expectation is that there will be a good agreement signed,” Mr. Pasztor said in an interview with the UN News Service ahead of Secretary-General Ban Ki-moon's meeting today in Paris with French President François Hollande to discuss the latest developments in the lead up to the Conference of States Parties to the UN Framework Convention on Climate Change, known as COP-21, as well as the next steps to be taken to ensure an ambitious outcome.
The UN official elaborated on the expected outcome in Paris by saying that “there has to be something that is there for the long term so that there is a clear signal that is provided to the market and to other actors that we are going in a certain direction of increasingly low carbon development.”
“It also has to have dimension of solidarity – solidarity with those who are more vulnerable, and those who are less capable of taken action on their own without financial and technological support,” he said.
“It also has to be credible – credible in terms of what we measure of what countries are doing but also credible in terms of what is being proposed such as financial support,” Mr. Pasztor said.
“And finally, what is perhaps most important, it has to take us to a less than 2 degree global warming path because that is the ultimate test of the whole package that will come out of Paris,” he said.
In this regard, Secretary-General Ban and President Hollande in Paris noted the importance of, and different ways of engaging Heads of State and Governments on climate change, including on the margins of the 70th session of the UN General Assembly in New York in September as well as at other meetings involving global leaders.
They also agreed on the importance of generating signals about the climate finance package for COP-21 as early as possible, such as at the meeting of Finance Ministers in Lima in October. In addition, the two men agreed on the importance of operationalizing the Green Climate Fund, and of reaching out to all Member States to further accelerate momentum in the coming months.
In his interview, the senior official said he had been up in the Arctic with the Secretary-General recently “where already they are measuring 2 degree warming over the baseline which is twice the global average.”
Mr. Pasztor said “you see the impact” everywhere, but he also drew attention to “a lot of incredible solutions especially when it comes to renewable energy.”
“If you see what has happened in Denmark and Germany and China, in different parts of the world, it just really amazing,” he said.
On another positive note, Mr. Pasztor said that “everybody has a role to play” to combat climate change.
“Everybody can do something,” he said, adding “If everybody in the world does something we would have solved the climate change problem.”