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President Zuma concludes a successful visit to Botswana for the SADC Summit
President Jacob Zuma has today, 18 August 2015, concluded a successful visit to Gaborone, in the Republic of Botswana, where he led the South African delegation at the 35th Ordinary Southern African Development Community (SADC) Summit of Heads of State and Government.
SADC is the primary vehicle used by the sub-region to promote balanced and equitable integration among its Member States, and to achieve sustainable development, allowing the region to address the key challenge of unemployment and poverty eradication.
The summit was held under the theme: “Accelerating Industrialisation of SADC Economies through Transformation of Natural Endowment and Improved Human Capital”. Accordingly, the summit focused much attention on the implementation of the Industrialisation Strategy and Road Map and the Revised Regional Indicative Strategic Development Plan 2015-2020.
President Zuma said the adoption of the Revised Regional Indicative Strategic Development Plan 2015-2020 was a major milestone in SADC’s endevours to promote intra-regional trade. “From here, officials will work on the technical aspects of the RISDP and identify bankable projects and make a cost analysis. We have already identified infrastructure development as one of the potential drivers of shared growth and prosperity,” said President Zuma.
The Republic of Botswana has assumed the role of Chair of SADC, taking over from the Republic of Zimbabwe. The Republic of Mozambique has assumed the Chair of the SADC Organ on Politics, Defence and Security Cooperation, taking over from the Republic of South Africa.
The Summit reviewed the state of peace, security and stability in the region, paying particular attention to the political and security situation in the Kingdom of Lesotho. In this regard, South Africa delivered its handover report to the SADC Summit as chair of the SADC Organ on Politics, Defence and Security Cooperation for the period August 2014 to August 2015.
The Summit concluded with the signing of the following agreements/protocols:
1. Agreement Amending the Protocol on Politics, Defence and Security Cooperation (Protocol) and Agreement Amending the Treaty of the Southern African Development Community (Treaty)
The amendment of the Protocol and the Treaty seek to allow the Inter-State Defence and Security Committee of the Organ on Politics, Defence and Security Co-operation to serve as a coordinating forum for the Chiefs of Corrections and Prisons in Southern Africa. The amendment of the Protocol is aimed at establishing a structure to expressly accommodate regional prisons services and related matters.
2. Declaration on Youth Development and Empowerment
The aim of the Declaration is to draw the attention and commitment of SADC Heads of State and Government to the urgency of youth development and empowerment in the context of regional cooperation, integration, development and peace and security in the region.
The declaration highlights key challenges facing the youth in SADC and calls upon Member States to commit and invest in youth in the areas of: economic empowerment; social development; political participation and governance; youth in emergency situations; security of vulnerable youth; research and monitoring, evaluation and reporting on youth.
3. Protocol on Trade Services (signed by other member states in 2012)
The objectives of the Protocol on Trade in Services (PTS) are to liberalise intra-SADC trade in services with a view to creating a single market for services in the region. The PTS provides a framework within which specific liberalization commitments must be negotiated, through successive rounds of negotiations. Six priority sectors were identified for the first round: communication, construction, energy, finance, tourism, and transport. Other sectors will be negotiated in successive rounds.
Services are critical for industrial development. The objectives of the Protocol are in accordance with the importance that South Africa attaches to regional economic integration and the development of the African continent. SA has a well-developed services sector, which is already active in many SADC countries. Services account for 67% of SA’s GDP, the second highest in SADC; this varies from 24% (Angola) to 71% (Mauritius).
President Zuma was accompanied at the Summit by Deputy President Cyril Ramaphosa, International Relations and Cooperation Minister Maite Nkoana-Mashabane, Trade and Industry Minister Rob Davies, State Security Minister David Mahlobo and Deputy Finance Minister Mcebisi Jonas.
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Time for region to enhance investments as EALA mulls over regional investment legislation
The Assembly wants the region to prioritise harmonization of investment initiatives and incentives if the bloc is to be promoted as a single investment area. To this end, EALA is calling for the formulation of an advocacy plan to spur investment policy and strategy as well as enactment of a regional law on investments.
The legislators also want a framework in place to ensure that specialization in investments are encouraged among the Partner States as opposed to intra-competition. In addition, they are calling for inculcation of mechanisms to enable investors to capitalize a certain percentage of profits in the EAC countries rather than repatriating all the money back to their home countries.
The issues are summed up in a report of the Communications Trade and Investment (CTI) on investment promotion policies in the region that was debated and adopted on Tuesday morning as the EALA Session commenced in Kampala, Uganda.
The report follows a workshop on Investment Promotion policies conducted by the Committee and held in Kigali, Rwanda in April this year. The Objectives of the Report include;
i) to understand the regional investment policies and strategies in EAC
ii) to understand the individual EAC Partner State investment codes/strategies and
iii) coming up with possible recommendations on the way forward for investment, Private Sector and industrial development.
The report presented to the House by the Chair of the CTI, Hon Mukasa Mbidde, states that investors have shown renewed interests in the region and this is based on the premise that Africa is on the verge of transformation. The continent should thus continue to receive inflows to improve balance of payment in to their national economies, the MP stated.
Industrial and Industrial development is a critical area of co-operation by Partner States as outlined in Article 79 and 80 of the EAC Treaty and envisaged under Article 44 of the EAC Common Market Protocol.
According to Hon Mbidde, proper policies and strategies need to be sought to promote Small and Medium scale Enterprise development (SMEs). Priorities in this area include the region’s institutional capacity to deliver business development services and creation of an enabling environment for improvement of SME policies and regulations.
The report states that though the volume of intra-EAC investments is still low, there is potential to enhance it. Republic of Kenya is the leading cross border investor in the EAC while the United Republic of Tanzania is a leading recipient of cross-border investments according to the report. The leading investment segments include ICT, Energy (oil and gas), agro-processing, building and construction and services which include wholesale, finance, insurance, health and education). In Rwanda, there is a conducive business environment which includes e-registration of companies and electronic single window for customs declarations. The country also passed over 21 business laws between the years 2008-2011.
In Burundi, the country has continued to improve its business climate including removing customs duty on investment goods made in the EAC and COMESA region. In Uganda, the country has secured investments by anchoring the same under the Constitution and the Investment Code (1991). Its investment strategies include the establishment of a one-stop centre as well as nurturing and development of SMEs.
The EAC Investment Code was formulated in 2006 as one of the tools for investment and private sector promotion as envisaged in the EAC Development Strategy – 2011/12 to 2015/16.
The objective of the EAC Model Investment code is to enhance qualitative and quantitative local, regional and foreign investment into the region. The Model Investment Code intends to facilitate adoption of transparent, predictable regulations and laws to the potential investors, especially in matters relating to compensation for loss of investment and dispute settlement mechanism. The model code thus introduces the need to nurse private investments well beyond the initial period of attracting and facilitating new investors.
At debate today, Hon Nancy Abisai appealed for Partner States to ensure they created conducive environment for businesses.
“We have good policies of investment in the Partner States, but they are disjointed. Let us look for a way to harmonise them, she said. Burundi has easy mode of registration while the United Republic of Tanzania Investment Act provides excellent opportunities for incoming investors. In Uganda, the Government permits locals, foreigners and joint ventures to invest freely. Kenya on its part has removed a number of licenses that previously hindered registration making it easier now. All this needs to be lauded,” she said.
“The point of disconnect is the failure to capture the business environment regionally”, she added.
Hon Mike Sebalu called on EAC citizens to spread their investments in the region citing employment, generation of revenue and improvement of livelihoods as necessary.
“I salute H.E. Uhuru Kenyatta, President of the Republic of Kenya, who was recently here for his pro- trade and investment agenda. This is focal for promoting integration”, he said.
Hon Shyrose Bhanji said the re-establishment of EAC also sought inter alia to improve the livelihoods of its citizens. “Unfortunately, lives are disheartening even though we are talking of big investments” “There is little or no room for employment for many youth who are university educated”, she said.
Hon Bhanji called on Partner States to put emphasis on small-scale farmers to create employment and said EALA can play a key role in educating the masses.
Hon Leonce Ndarubagiye called for a regional law on anti-corruption and stiffer penalties to stem the vice, lamenting that it was contributing to killing investments in the region.
Hon Patricia Hajabakiga said real economic development can be realized by meeting with investors to ascertain that the policies on the ground are actually been implemented.
Others who supported the debate were: Hon Peter Mathuki who called for efficient transport network and infrastructure systems for the region to facilitate movement of goods and services. He called for means to curb corruption to enable citizens enjoy their rights.
Hon Zein Abubakar called for good governance as a pre-cursor to enhancing investment in the region. Hon Fredric Ngenzebuhoro, Hon Susan Nakawuki, Hon Martin Ngoga, Hon Sarah Talaso and Hon AbuBakr Ogle also rose in support of the report.
Hon Shem Bageine, Minister for EAC, Uganda and standing for the Chair of Council of Ministers remarked that the East African Court of Justice (EACJ) had already taken up its place as the Judicial organ to arbitrate on trade disputes. This follows the extension of the jurisdiction of the Court to include matters of trade and investments. He said that the region was keen to see export trade enhanced and that the Council would keenly study the recommendations of the report with a view to harmonizing the investment codes.
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15th International Economic Forum on Africa: Africa Beyond 2015
The 15th International Economic Forum on Africa, “Africa Beyond 2015”, is set to take place on 9 September 2015 at the Deutsche Telekom in Berlin, Germany.
Africa’s gross domestic product (GDP) growth is expected to strengthen to 4.5% in 2015 and 5% in 2016 after subdued expansion in 2013 (3.5%) and 2014 (3.9%). Alongside this solid growth outlook, the global and pan-African discussions provide the continent with an unprecedented opportunity to chart a more inclusive and sustainable growth agenda for the region. In the long-term, the stakes are high: transforming African economies, ending poverty, preserving the environment and ensuring well-being and prosperity.
The Africa Forum is the annual gathering where OECD and African policy makers, private sector representatives, academics and civil society leaders meet to debate the performance of African economies and the challenges ahead. Organised by the OECD Development Centre and the German Federal Ministry for Economic Cooperation and Development, in collaboration with German Federal Foreign Office and in partnership with the African Union Commission, the 2015 edition will focus on Africa’s development agenda beyond 2015. It will do so in light of the debates on Sustainable Development Goals and Financing for Development, the impact of the continent’s future demographic development on its economic transformation, and the policy responses to climate change.
The debates benefited from the conclusions of the African Economic Outlook 2015 report, jointly produced by the OECD Development Centre, African Development Bank (AfDB) and the United Nations Development Programme (UNDP).
Session 1: Beyond 2015 – Africa’s Development Agenda
The African Union Agenda 2063 ushers in the Strategic Framework for Inclusive Growth and Sustainable Development. Through a participative approach, it empowers all stakeholders to contribute to Africa’s economic and social transformation during the next five decades. Furthermore, Africa aims to play a more important role in the global development agenda with its Common African Position. In the long term, the stakes are high: transforming African economies, ending poverty, preserving the environment and ensuring well-being and prosperity. What will be the challenges and opportunities for the continent to realise the Agenda 2063?
Session 2: Climate change and agricultural transformation in Africa
How do African countries increase food production and eradicate hunger and malnutrition in the face of fast demographic growth, while at the same time reducing emissions and combating climate change? Solving that complex equation requires swift action to promote agricultural transformation and adapt to climate change. With both its challenges and opportunities, such transformation can lead to increased productivity as well as low-carbon, climate resilient socio-economic development.
Session 3: Can regional development help Africa tap its demographic dividend?
Structural transformation – the process by which new, more productive activities arise and resources move from traditional activities to these newer ones – is Africa’s overarching priority. By 2050, Africa will be home to an additional 1.3 billion people, and more than 47 million young people will be entering the labour market every year looking for jobs. Despite some progress over the last decade, current policies have proven ineffective at speeding up job creation in productive sectors. How can regional development strategies, focusing on Africa’s regional-specific assets, help the continent turn its demographic dividend into a driver of structural transformation?
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Peoples’ participation in implementation, follow up and review of post-2015 Development Agenda: An African perspective
The year 2015 is an important one for global development as the Millennium Development Goals endorsed in 2000 with 8 goals, 21 targets, and 60 indicators are coming to an end in less than 100 days.
In the same period, the international community is expected to endorse an ambitious, transformative, and people centered post-2015 development agenda comprised of 17 goals, and 169 targets. The indicators for the post-2015 development agenda are a work-in-progress and are scheduled to be completed by March 2016.
Several key processes are happening in 2015, such as the approbation of the Addis Ababa Action Agenda, which includes an agreement on follow-up and review mechanism for Financing for Development commitments; the endorsement of the Sendai Framework for Disaster Risk Reduction 2015-2030; the upcoming Climate Change negotiations at the 21st Conference of the Parties to the UNFCCC (COP-21) in December 2015; and the Intergovernmental Negotiations (IGNs) on the post-2015 Development Agenda, which ending on 31st July 2015 with the final outcome document that is going to be tabled to the Heads of States and Government at the United Nations Summit in September 2015.
With all these key processes happening, it is important to focus on the content, citizens and civil society participation, but also most importantly to focus on their implementation, follow-up and review, and the role of citizens and civil society in the same.
As opposed to the Millennium Development Goals, the post-2015 Development Agenda has been inclusive, gathering citizen’s priorities through national consultations in 88 countries (36 from Africa), 11 global thematic consultations, and online surveys through my world survey.
Civil society has also been engaged in regional processes shaping the post-2015 development agenda framework. In Africa, civil society organizations played an active role in coming up with the Common African Position on post-2015 Development Agenda (CAP) providing them with full ownership of the process.
However, without a strong political commitment for implementation, follow-up and review, and participatory involvement of people and their organizations, there is a high risk that the outcomes from these processes could just end up in papers.
For the plans to hit the ground running as of 1st January 2016, and to effectively leave no one behind, therefore we need strong political commitment and institutional frameworks at national level to support the implementation of the agenda which is twice the size of the MDGs, and involving the three dimensions of sustainable development stablished at the 1992 UN Rio conference: Economic, Social and Environment dimensions.
A study conducted by United Nations Economic Commission for Africa revealed that countries have taken different approaches in developing and implementing National Strategies for Sustainable Development. While some countries are improving or restructuring the decision making process to achieve a full integration of social, economic and environmental pillars and include a broad range of participation, others have taken a complimentary approach, whereby a separate strategy document that embodied the broad strategic framework was prepared, then other strategies and planning instruments were updated to incorporate the sustainability principles espoused in the framework strategy.
Even though efforts are underway in most countries to ensure timely and effective implementation of the post-2015 Development Agenda, this still teaches us and tells us a lot about political commitment for implementation. All in all, coordination of the three pillars has not been easy in most countries in Africa.
Recognizing these gaps and inline with the Beyond 2015 campaign focus shift from Policy to Action, the campaign in Africa is focusing more on implementation and follow-up and review at national and regional level insisting on effective integration of people and their organizations into the follow-up and review mechanisms at national level.
These efforts have led to meetings between civil society organizations and their governments, CSOs participation in national consultations on the post-2015 Development Agenda, and to join as part of national delegations for the Intergovernmental Negotiations on the post-2015 Development Agenda. The Civil Society Engagement Mechanism has become a model in the region and beyond. Its replication is current ongoing in a number of countries.
The campaign is actively engaged in regional implementation, follow-up and review processes through the African Union Commission, African Development Bank and United Nations Economic Commission for Africa. This includes a side event at the UN in May on Regional and National Follow-up and Review Mechanisms: opportunities and challenges for the post-2015 Development Agenda in Africa, which was organized in collaboration with the Permanent Mission of the United Republic of Tanzania and African Union New Partnership for Africa’s Development (NEPAD).
The campaign in Africa is also leading the process of institutionalization of the role of major groups, civil society, and other stakeholders in agenda setting, implementation, follow-up and review of the Sustainable Development Agenda in Africa (this includes both post-2015 Development Agenda and Africa’s Agenda 2063).
Existing follow-up and review mechanisms such the African Peer Review Mechanism (APRM), and the Africa Regional Forum on Sustainable Development (ARFSD) already have good civil society engagement mechanisms which need to be strengthened. It is crucial for the achievements of the post-2015 Development Agenda to be assessed through the eyes of the citizens especially of the most marginalized and the ones living in poverty.
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The Resource Curse Revisited
A new paper finds that while natural resources may provide low-income countries with a significant development opportunity, the prevailing extractives-led growth agenda is in urgent need of re-evaluation.
This paper challenges the view that the ‘resource curse’ – for which so many academics found evidence in previous decades – has now been laid to rest.
During the commodities boom of the past decade, a number of influential policy and corporate institutions have encouraged poor countries to capitalize on below-ground resources for economic growth and development. The key assumption is that improved management of the extractives sector will enable it to spearhead positive national development and avoid resource curse effects such as declining global competitiveness in the rest of the economy and a widening wealth gap. This assumption continues to influence governance advice and country investment choices.
The extractives-led growth agenda promoted by donors and international advisers in multilateral banks, consultancies and some development agencies has tended to reinforce domestic, government and investor pressures to pursue a ‘fast-track’ approach to extractives projects. This appears logical, given the obvious benefits of foreign-investment inflows and export revenues for countries suffering from poverty, lack of infrastructure and high levels of indebtedness.
However, there is an urgent need to re-evaluate whether the policy advice stemming from this agenda can serve as an antidote to the negative effects identified in the resource-curse literature. First, there is often a mismatch between governance advice given and the capacity of countries to follow it. Second, the global context has changed: exporters are suffering as a result of the current downturn in commodity prices, while reliance on the sale of high-carbon fuels is challenged by the global shift to lower-carbon technologies and energy efficiency.
Extractive revenues should not be viewed as income to be consumed, but as representing a reshuffling of the national portfolio of assets. Converting extractive resources below ground into cash above ground raises key questions about how this cash can be deployed to create productive assets for the future which do not rely on depletable resources.
Diversification of the economy away from the resource sector over an appropriate timeframe remains a key priority. In many cases, this will require slower development of projects to allow time for institutional capacity in government and the private sector to develop.
More economic and governance capacity needs to be in place before investment begins in a project, to enable investment and eventual revenues to generate real benefits to the rest of the economy, as well as appropriate, sustainable diversification.
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AfDB bails out Zimbabwe
Zimbabwe’s bid to join the African Trade Insurance Agency (ATI) has received a major boost after the African Development Bank (AfDB) chipped in with $4 million of the money required to get registration, Finance minister Patrick Chinamasa has said.
Zimbabwe requires $15 million as minimum capital subscription to the ATI.
“Government has since secured $4 million from the African Development Bank towards the minimum capital subscription of $15 million. The balance is being mobilised from local private financial institutions during the last half of 2015,” Chinamasa said.
He said the Ministry of Industry and Commerce had initiated the ratification process which was expected to be finalised before the end of the year.
ATI provides political risk and trade credit risk insurance products with the objective of reducing the business risk and cost of doing business in Africa.
It aims to help increase investments into African member countries and two-way trade flows between Africa and the world.
Chinamasa said ATI membership would enhance the country’s capacity to borrow from international financial markets by significantly reducing the country’s sovereign risk premium arising from negative perception by the international community.
Joining the ATI ties in with government’s thrust of reducing the cost of doing business and mobilising resources from international financial institutions to help reboot the economy which has shown signs of stress.
ATI has 10 African member countries that include Benin, Burundi, Democratic Republic of Congo, Madagascar, Malawi, Rwanda, Tanzania, Uganda, Kenya and Zambia.
Its other members include AfDB, Africa Reinsurance Corporation, Atradius Group, SACE, Comesa, PTA Bank and Zep Re.
ATI was launched in 2001 with the financial and technical support of the World Bank and the backing of seven African countries.
Since 2003, it has supported over $13 billion worth of trade and investments across the continent.
The membership has expanded over the years and ATI plans to attract even more African member countries and international financial institutions.
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2015 SADC People’s Summit Communiqué
‘Reclaiming SADC for People’s Development – SADC Resources for SADC Peoples’
We the representatives of more than 500 delegates drawn from grassroots movements, community-based organizations, faith based organizations, women’s organizations, labour, student, youth, economic justice and human rights networks and other social movements; gathered at the SADC People’s Summit convened by the Southern Africa People’s Solidarity Network (SAPSN); People’s Dialogue and Rural Women’s Assembly (RWA) at the Big Five Lodge, Gaborone, Botswana, from the 15th-16th August 2015, under the theme ‘Reclaiming SADC for People’s Development – SADC Resources for SADC People’;
Acknowledging the role of the Southern Africa People’s Solidarity Network in mobilising citizens of the regions to defend their livelihoods, offer alternatives and fight for their rights;
Noting the existence of SADC as a regional economic bloc with a relatively better peace and security dividend, in a well resourced Africa, but burdened with conflict and human insecurity;
Concerned with:
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Rising and unprecedented levels of corruption in the region negatively impacting financing for development;
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The high levels of Illicit Financial Flows affecting the region and the rest of the African continent;
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The lack of financial support, especially subsidies, to small scale farmers;
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The continued resource exploitation and looting by foreign investors and Transnational Corporations in collaboration with our ruling class and elites with no tangible benefits to the citizens;
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The increasing challenges that farmers continue to face, land grabs, poor trade policies, weak tenure regimes as well as SADC member states’ failure to promote indigenous seeds and knowledge systems which resist climate change vagaries;
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Climate change catastrophe in the form of droughts, floods and extreme temperatures;
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Increasing failure by most SADC Governments to guarantee access to adequate and nutritious food, essential social services, in particular health, education, water and sanitation;
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Recurrence of attacks on African nationals in some SADC countries, as well as the deteriorating political and economic conditions in some countries in the region, forcing citizens to flee to other countries;
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The proliferation of pro-capital labour laws in our countries leading to intensification of labour exploitation in the form of unfair labour practices and precarious employment conditions;
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The shrinking space for public participation in key national and regional platforms, where our future and livelihoods are determined;
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The laxity of leaders in decisively dealing with socio-economic and political crises, particularly in Swaziland, Zimbabwe and Lesotho, which remain a threat to regional stability;
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Lack of recognition for care workers in the region, in the wake of the huge burden placed upon them by member States, by failing to provide decent hospital care and access to essential and life saving medicines to a majority of their citizens;
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Increasing incidences of Gender-based Violence in our countries and inadequacy of the justice delivery system to effectively deal with the matter;
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Growing youth unemployment;
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Increasing incidences of child marriages;
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The continued dominance of neo-liberalism and attendant macroeconomic terrorism, that is aided by increasing incidence of Repression and rising Inequality in SADC member states;
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The slow progress towards implementation of the SADC protocol on free movement of the African peoples;
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The continued open collusion with the European Union to mortgage our future and exploitation of resources and people through Economic Partnership Agreements;
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Investment agreements that are now triggering massive Land Grabs in the region;
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Lack of progress in integration of youth and other vulnerable groups in all structures of decision making and implementation;
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The attack on food sovereignty through the take-over of agricultural and food systems by Multi-national Corporations (MNCs); and
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The heightened harassment of ordinary people especially at ports of entry such as the BeitBridge border post and others.
We therefore commit to heighten our levels of solidarity and offer each other maximum support in our campaign to Reclaim SADC for the SADC people’s development.
We assert that SADC resources must be used to truly and primarily benefit the peoples of the region; and we must work tirelessly to destroy the inherited colonial structures, that are largely responsible for the corporate impunity in the region; and the profit driven enclaves of progress, that are not designed to serve the sustainable use of resources and meaningful development in the SADC region and Africa as a whole.
We commit to campaign against corporate impunity, which has its roots in the colonial exploitative structures maintained by leaders in our member states.
We call on SADC member States and Governments to the following:
On Tax Justice and the fight against Illicit Financial Flows
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Implement the recommendations of the High Level Panel of Experts’ report on Illicit Financial Outflows in Africa, as adopted by the AU Heads of State and Government Summit in January 2015;
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In particular, Governments in Southern Africa must trace, stop and get back resources from illicit financial flows; and these proceeds should be channelled towards financing social protection programmes at the national level;
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The implementation of taxation regimes that are consistent with our call for a SADC-wide basic income grant.
On African Solidarity, Migration and People’s Movement
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Formally recognise that the issue of Afrophobia/xenophobia is a continental challenge that needs a collective approach, including dealing with all country-based challenges, and ensuring that individual Governments take full responsibility for this phenomenon;
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Recognize that Afrophobia/xenophobia attacks are a consequence of the failure of capitalist development model on the region and that another approach is needed to enhance regional co-operation based on solidarity;
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Adopt policies at the national level that ensure migrants’ access to human rights and basic public services; and
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Adopt and implement policies facilitating the free movement of people across borders in the SADC region.
On Governance, Democracy and Human Rights
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Deal decisively by ensuring that all member States strictly adhere to the promotion of human rights, good governance, the rule of law, as well as guaranteeing the safety and protection of Human Rights Defenders, as they carry out their legitimate duties in the region;
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Promote the existence of plural political systems, particularly multi-party and participatory democracy, where diversity is tolerated and citizens freely organise processes that are based on mass mobilisation and freedom to voice alternatives without fear of victimisation;
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Reinstate the SADC Tribunal and work towards the establishment of a Regional Court of Justice; and
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Urgently facilitate, through the on-going SADC mediation process, political reforms, including security sector reforms and participation of citizens in the Kingdom of Lesotho dialogue process
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The intensification of the investigation into the disappearance of Itai Dzamara by the Zimbabwe government.
On Cross boarder traders, small scale farmers
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Governments must extend the Simplified Trade Regime (STR) implemented in COMESA, to the SADC region with a focus on the removal of Non-Tariff Barriers, Empowerment of Women, and simplified paperwork;
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Governments must put in place pre-requisite infrastructure to support production, agro-processing & value addition of agricultural produce and promote market access in regional and other export markets; and
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Governments must ensure that trade policies protect women small-scale farmers and cross-border traders and that they need to be gender-sensitive, in line with SADC gender declarations.
On Trade Negotiations and Agreements
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Reject the Economic Partnership Agreements (EPAs) with the European Union and show leadership in the interest of the SADC people in all regional and multilateral trade negotiations.
On Climate Change
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That Governments recognize the failure of neo-liberal approach to addressing climate change, such as carbon market and thus take the stand at the COP21 summit not to engage transnational and corporate as being the solution to climate change;
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That Governments depart from the neo-liberal approach, which recognizes nature only as a commodity and shift the paradigm so that nature rights are being recognized and that nature be considered as a subject and not an object; and
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That Governments make the climate change issue and all its collaterals as a priority in all multi-lateral and bi-lateral agreements; and that the protection of local communities and indigenous rights are absolute priorities in those agreements.
On Agricultural Finance, Seed Sovereignty and Climate Justice
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Promote the use of indigenous seeds which are resistant to climate change effects;
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Review trade policies and prioritize locally produced goods, while prohibiting the dumping of Genetically Modified Organisms (GMOs) in the region;
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Establish land and agricultural banks which offer loans to farmers at zero interest rates, in addition to introducing result-oriented State subsidies, for small-scale producers;
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Stop facilitating “land grabs” by international and domestic corporates and individuals, as they are creating landlessness, conflicts and loss of livelihoods; and
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Adhere to the AU Maputo Declaration of 2003, by allocating 10% of the national budget towards agriculture.
We, the peoples of SADC, continue to be strengthened by our sharing of experiences and development aspirations, within this SAPSN People’s Summit and the resolve to grow people-to-people solidarity.
We commit ourselves to the struggle by all means necessary.
VIVA the Peoples of SADC! Viva the solidarity and rights of the Peoples of SADC! Viva the truly Peoplecentred and People-responsive SADC!
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tralac’s Daily News selection: 18 August 2015
The selection: Tuesday, 18 August
SADC Heads of State and Government Summit: updates
Closing remarks by President Khama
The people of Southern African would not judge us by the adoption of key strategic documents, but rather by the outcomes achieved, following implementation. I therefore call upon all of us to implement agreed priorities in these strategic plans in order to improve the well-being of our peoples. It goes without saying that we need each other if we are to prosper as a region. The Summit has also adopted other important decisions that cut across sectors. It is necessary to have these decisions implemented in good time.
Acceptance speech by President Khama
President Zuma hands over chairship of SADC Organ
SADC has to develop ordinary people - Dr Geingob
IGAD: Agreement on the resolution of the conflict in the Republic of South Sudan
North-South Corridor: Chisali-Nakonde road rehabilitation project appraisal report (AfDB)
The road has progressively deteriorated despite these maintenance interventions. The poor condition of the road is detrimental to the movement of goods and services. In late 2014, emergency maintenance works were undertaken to ensure the road is not adversely affected by the rains, and as such a major intervention is now required to ensure the critical route does not present a transit bottleneck for trade in the region. The total project cost is estimated as USD 255.76 million, to be financed by the Bank (USD 193 million), AGTF (USD 50 million) and GRZ (USD 12.76 million).
Northern Corridor: Road upgrade to boost regional trade (Daily Nation)
Training workshop on trade in services negotiations for AU-CFTA negotiators: the programme is posted
AU tasks ARSO strategies to achieve free trade in 2017 (This Day)
Foreign investment in Angola no longer has minimum value (Macauhub)
The minimum value for a private investment in Angola is now set at 50 million kwanzas for domestic investments and at any amount for foreign investments, according to the New Private Investment Law, approved on 11 August (Law 14/15).
Investments in Angola will be faster with new law (Macauhub)
Angola asks citizens to curb foreign currency use amid shortage (Bloomberg)
Retreat of foreign investment from Africa means less looting: Gaming, naming and shaming ‘licit financial flows’ (Triple Crisis)
The meeting in Harare was dedicated to fighting illegal capital flight from across the African continent. But would some of the region’s sharpest economic-justice NGOs take the next step and also consider fighting legal financial outflows – in the form of profits and dividends sent to TransNational Corporate (TNC) headquarters, profits drawn from minerals and oil ripped from the African soil? [Download]
South Africa’s changing demographic could lift growth to 5.4% by 2030 (World Bank)
The report shows that if in the next 15 years enough jobs could be created to absorb new entrants and lower the unemployment rate by three-quarters, and if vocational training could be used to retool the long-term unemployed to make them more attractive to employ, and if education improved so new entrants to the workforce are better equipped for the modern workplace, real GDP growth would accelerate to 5.4% per year, enough to allow per capita income to double and extreme poverty to be virtually eliminated by 2030. It also contends that South Africa will need to take policy action along several fronts to realize this potential. [Download]
ANC's National General Council documentation (includes a chapter on economic issues)
Zimbabwe: Strengthening institutions of transparency and accountability project (AfDB)
The project’s broad development objective is to improve transparency and accountability in the public sector and promote gender equality for inclusive and sustainable economic development. The specific objective is to improve institutional capacity and effectiveness of institutions of public oversight and accountability. The project has three mutually reinforcing components: (i) improved capacity and effectiveness of Parliament; (ii) enhanced capacity and effectiveness of the Office of Auditor General; and (iii) Project management support.
Swaziland: EU sugar prices dropped by 50% (Observer)
Though the European Union has been a lucrative market for Swazi sugar, the price received by the local industry has dropped by about 50 percent in a space of two years. Swaziland Cane Growers Association Chief Executive Officer Sipho Nkambule said up to now Swazi cane growers have not felt the full impact of the price decline. He said the cushion has been provided by factors such as exchange rate and alternative markets.
Namibia to export bone-in beef to China (The Namibian)
Namibia will be the first African country to export bone-in beef to China after the two countries signed a protocol on veterinary health conditions and quarantine in Beijing, China, this week. The Chinese market, as opposed to the European Union, Switzerland and Norway markets, will allow for the export of bone-in beef, provided that the animals are slaughtered and the beef is processed and certified at an export-approved slaughterhouse or abattoir by the directorate of veterinary services.
Sugar shortage looms as cheap imports row rages (Business Daily)
Kenya’s stocks of sugar have fallen below normal levels, causing a creeping shortage in the market, the sugar sector regulator said yesterday, adding a new dimension to the raging public debate over sugar imports. The volume of sugar stocks in all the 11 factories stood at 3,678 tonnes last Friday, way below the 9,000 tonnes that the millers are expected to hold at any given time, the Agriculture Fisheries and Food Authority (AFFA) said.
Much ado about sugar, but times must change (editorial comment, The East African)
African Natural Resources Centre Strategy 2015-2020: revised version (AfDB)
This document translates the Concept Note (Annexure 1) approved by the Board in 2013 into a Strategy for the African Natural Resources Center. It is intended to operationalize the Center by putting its activities in the context of the Bank’s Ten Year Strategy (TYS) and that of relevant sector strategies already adopted by the Bank. The document provides a contextual overview of the natural resource environment in Africa and spells out the Center’s strategic approach to assisting governments manage the opportunities and challenges. The Strategy proposes a vision, mission, objective, strategic plan, products and an operating model for the Center. It seeks to complement and collaborate with departments of the Bank and regional initiatives such as those of the African Union.
WATH earmarks more than $62m to promote export trade in West Africa (Ghana Business News)
The misconceived trade tussle between Nigeria and the EU (ThisDay)
In an interesting twist of events last week, the federal government stated unequivocally that the strife and angst over the reported economic tension between Nigeria and the EU were mostly based on ignorance and misinformation both in the media and the public. According to the Permanent Secretary, Federal Ministry of Agriculture and Rural Development, Mr. Sonny Echono, the recent EU ban on the Nigerian goods was blown out of proportion.
This report reveals a shift in overall regional allocation priorities by donors towards middle income countries in Asia, whereas two-thirds of the countries in Sub-Saharan Africa are projected to receive less aid in 2017 than in 2014. The worrying trend of continued stagnation in programmed aid to heavily aid dependent countries calls for greater ambition to improve countries’ access to external development finance for the post-2015 development framework. The extent of aid predictability is mainly explained by donors’ own operational policies and procedures. The availability of forward estimates from donors’ own budget processes is a prerequisite for being predictable; however, other key factors determining whether this information is available and communicated with partner countries include donors’ legal and political frameworks, their organisational set-up, the status of their partnerships with countries, and the extent of systematic information exchange practices.
Mozambique may sell half its public companies (Club of Mozambique)
Namibia: Dark clouds loom over agri-sector...urgent relief offered for small stock producers (New Era)
Kenya exempts US agency from taxes to increase investment (Business Daily)
East Africa: Regional tourism forum set for Friday (Daily Nation)
Tanzania: July Monthly Economic Review (Bank of Tazania)
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Incoming SADC chair calls for improved economic cooperation
The 35th Ordinary Summit of the Southern African Development Community got underway in Gaborone, Botswana on 17 August with incoming chair, President Seretse Khama Ian Khama of Botswana, calling for improved economic cooperation within the region.
Although steady progress has been realized by SADC in boosting intra-regional trade, imbalances still exist within the region as the majority of southern African countries continue to trade more with the outside world instead of among themselves.
This has been attributed to various factors including poor infrastructure and imposition of non-tariff barriers by African countries.
Another major factor is the lack of a vibrant industrialization base that transforms African countries from being sources of cheap raw materials into producers of finished products.
Speaking soon after taking over the SADC chair from his Zimbabwean counterpart President Robert Mugabe, Khama said it was time southern Africa addressed the situation to ensure the region benefits from its own resources.
“The current trade imbalances within the SADC region are reason enough for us to expedite and jump-start efforts towards industrial development, particularly with regard to the creation of value-chains,” Khama said.
He urged the more advanced economies within the region to assist those that are least developed and small “to leverage on them (and) to also increase their productive capacities.”
Such cooperation among SADC countries, he said, “will lead to jobs being created and thus reducing labour mobility and concentration in one or two economies in the region.”
SADC this year adopted an Industrialization Strategy and Roadmap to leverage on its vast natural resources endowment and ensure that the region gets maximum benefits from these to improve the livelihood of its citizens.
Khama said while the strategy had “reshaped the pace and course of our region in our quest to maximize beneficiation of our natural resources as a way of creating a better life our people,” it was critical for the region to fully implement the measures proposed in the strategy to ensure the industrialization blueprint is a success.
“It is, therefore, my sincere hope that through our deliberations going forward, we will be able to come up with decisions which will guide and direct our officials towards actualising the SADC Industrialisation Strategy and Roadmap.”
Adopted by the SADC Extra-Ordinary Summit of Heads of State and Government held in Harare, Zimbabwe in April, the Industrialization Strategy and Roadmap aims at accelerating the momentum towards strengthening the comparative and competitive advantages of economies of the region.
It is anchored on three pillars, industrialization, competitiveness and regional integration
Khama said is it equally important to continue scaling-up the implementation of regional infrastructure, given that it is a “a key enabler to economic integration and development, and more importantly, in support of our industrialisation effort”
“We should, therefore, redouble our efforts towards accelerating implementation of power generation and transmission projects as the regional economy is virtually on its knees owing to incessant power outages that continue to disrupt economic activities and adversely impact on the quality of lives of our people,” he said.
With regard to food security, there is need for SADC to boost agricultural development including agro-processing since the sector is one of the component of the industrialization programme.
On the recent launch of Tripartite Free Trade Area (FTA) involving the Common Market for Eastern and Southern Africa, East African Community and SADC, he said the region should take advantage of the enlarged market to boost trade among other African countries.
The Tripartite FTA, which creates a combined population of some 600 million people covering half of the member states of the African Union (AU) and a Gross Domestic Product (GDP) of about US$1 trillion, aims to promote the smooth movement of goods and services across borders, as well as allowing member countries to harmonize regional trade policies to promote equal competition.
“This (launch of the Tripartite FTA) is indeed a milestone achievement in our endeavor to increase trade among African states,” he said, adding that “it is quite disheartening that there is negligible trade between and among African states,” because most African countries “are primarily suppliers of raw materials with very few industrialized nations among us.”
Khama said despite the challenges, SADC and the rest of the African continent has the capacity to address these challenges, particularly if all countries remain united and committed to the goals of advancing regional integration.
“I wish to call for our collective efforts in ensuring that we are successful in our endeavours to transform the SADC region into a better place, envied throughout the world as a beacon for political stability and economic prosperity,” he said.
“As such, I take this opportunity to encourage all of us to be part of the journey towards ensuring that SADC successfully delivers on its mandate.”
Outgoing SADC chair, President Robert Mugabe concurred, saying countries in the region can achieve more by working together rather than in isolation.
He urged SADC member states to implement all regional decisions, including the Industrialization Strategy and Roadmap and the Revised Regional Indicative Strategic Development Plan (RISDP) 2015-2020 to advance the integration agenda.
“Let us now work assiduously towards the early and speedy implementation of these regional programmes and activities,” he said.
The Revised RISDP is a five-year plan that guides the implementation of all SADC programmes from 2015-2020.
The 35th SADC Summit is running under the theme, “Accelerating Industrialization of SADC Economies, Through Transformation of Natural Endowment and Improved Human Capital.”
The theme continues the trajectory of the previous Summit held last year in Victoria Falls, Zimbabwe, which focused on economic transformation and sustainable development “through beneficiation and value addition”.
» All the Statements on the occasion of the official opening 35th Ordinary Summit of SADC Heads of State are available at this link.
Acceptance Speech by His Excellency, Lt. Gen. Seretse Khama Ian Khama, President of the Republic of Botswana at the 35th Ordinary Summit of SADC Heads of State and Government, 17 August 2015
Gaborone, Botswana
It is an honour for me to address this 35th Summit of the SADC Heads of State and Government. I am humbled by the confidence that the Region has demonstrated by bestowing Botswana the honour of chairing SADC for the next twelve (12) months.
Allow me, to pay tribute to the outgoing Chairperson of SADC, His Excellency Robert Gabriel Mugabe who has guided the Organisation and when during his tenure, SADC adopted the Industrialisation Strategy and Road Map and the Revised Regional Indicative Strategic Development Plan (RISDP), at the Extra-Ordinary Summit held in Harare, Zimbabwe, in April 2015. There is no doubt that this has reshaped the pace and course of our region in our quest to maximise beneficiation of our natural resources as a way of creating a better life our people.
It is imperative for the Region to expedite the implementation of the RISDP and bring to life the SADC Industrialisation Strategy and Road Map.
To this end, this Summit is appropriately being held under the theme “Accelerating Industrialisation of SADC Economies through Transformation of Natural Endowment and Improved Human Capital”.
The current trade imbalances within the SADC region are reason enough for us to expedite and jump-start efforts towards industrial development, particularly with regard to the creation of value-chains. In this way, the more industrially advanced economies within us can assist the least-developed and small vulnerable economies to leverage on them to also increase their productive capacities. In turn, this will lead to jobs being created and thus reducing labour mobility and concentration in one or two economies in the region.
It is therefore my sincere hope that through our deliberations going forward, we will be able to come up with decisions which will guide and direct our officials towards actualising the SADC Industrialisation Strategy and Roadmap.
It would be remiss of me not to acknowledge and applaud the achievement in the area of market integration, relating to the recent launch of the COMESA-EAC-SADC Tripartite Free Trade Area in Sharm El Sheik, Egypt in June 2015. This is indeed a milestone achievement in our endeavour to increase trade among African states. It is quite disheartening that there is negligible trade between and among African states. It is a sad fact that we are primarily suppliers of raw materials with very few industrialised nations among us.
Equally important is the need to continue to scale up implementation of regional infrastructure, given that it is a key enabler to economic integration and development, and more importantly, in support of our industrialisation effort. We should therefore redouble our efforts towards accelerating implementation of power generation and transmission projects as the regional economy is virtually on its knees owing to incessant power outages that continue to disrupt economic activities and adversely impact on the quality of lives of our people.
The conclusion of the Negotiations for the Economic Partnership Agreement (EPA) between the European Union (EU) and SADC is another milestone achievement which must be acknowledged as it guarantees uninterrupted market access for SADC exports to the EU market.
In the area of peace, security and democracy, the SADC region remains one of the most peaceful and stable on the Continent, thanks to mechanisms that we have put in place in the context of the SADC Organ on Politics, Defence and Security Cooperation. I wish to commend, in particular, the Organ Troika under the Chairpersonship of President Jacob Zuma, for working tirelessly and providing rapid response to emerging challenges on peace and security.
We are perturbed by the rising incidences of terrorism and brutal attacks in East and West Africa together with those in the Magrheb region which have resulted in the loss of numerous innocent lives. We seriously condemn these criminal acts against humanity and pray for the end of these attacks. The SADC region’s contribution towards Africa’s standby Force remains critical, as there would be no stability in Southern Africa, without continental stability.
The war on reducing HIV and AIDS infections is continuing. The SADC Secretariat should continue to monitor the situation and coordinate the necessary regional interventions with Member States until we are comfortable that further HIV infections are a thing of the past.
As regards food security, there is no doubt that our ability to provide adequate food for the region is a matter of pride and dignity. We need to maintain self-sufficiency, bearing in mind that one component of our industrialisation programme must be agro-processing, which requires a consistent supply of agricultural products.
The region should therefore remain steadfast in its effort to implement the key activities articulated by the Maseru Declaration on HIV and AIDS as well as the Dar es Salaam Declaration on Agriculture and Food Security.
It is critical that we continue to formulate new and strengthen existing programmes of intervention to address poverty in our region. The era of MDGs has come and gone, and it is evident that some progress has been made. As we move into the era of Sustainable Development Goals (SDGs) to be launched at this year’s United Nations General Assembly in September 2015, we need to brace ourselves for the development of a robust result based strategy that guarantees positive socio-economic outcomes for our citizens.
In the area of climate change, SADC continues to work with all progressive partners to ensure the protection of the planet for the benefit of our future generations that may question our sincerity in years to come. In the same vein, we need to ensure that we build consensus on a continental basis as we proceed to global fora, among them, COP 21 to be held in Paris, France, in December, 2015. In the meantime, we need to scale up our efforts towards mitigation of potential adversities of climate change, in particular adaptation measures and awareness creation amongst our citizens. In the final analysis, as a region and as a continent, we need to work together with other progressive global partners to ensure that we contribute to a successor statute to the Kyoto Protocol that expires in 2020.
I wish to conclude, by calling for our collective efforts in ensuring that we are successful in our endeavours to transform the SADC region into a better place, envied throughout the world as a beacon for political stability and economic prosperity. As such, I take this opportunity to encourage all of us to be part of the journey towards ensuring that SADC successfully delivers on its mandate.
I thank you for your kind attention.
Pula! Pula ! Pula !
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Sugar shortage looms as cheap imports row rages
Kenya’s stocks of sugar have fallen below normal levels, causing a creeping shortage in the market, the sugar sector regulator said yesterday, adding a new dimension to the raging public debate over sugar imports.
The volume of sugar stocks in all the 11 factories stood at 3,678 tonnes last Friday, way below the 9,000 tonnes that the millers are expected to hold at any given time, the Agriculture Fisheries and Food Authority (AFFA) said.
“The steep drop in sugar stocks below the required levels is mainly because of inefficiencies in most of the factories,” AFFA director-general Alfred Busolo said.
At current levels, the national sugar stocks are below the required daily output of 4,000 tonnes, representing a steep decline that the regulator has attributed to factory inefficiencies.
The AFFA said nearly all millers were operating below their daily capacities, causing a lot of sucrose to go to waste.
Mr Busolo said there was sufficient raw material to sustain optimal production but which has not been possible because most of the sugar millers are grossly inefficient.
Ramamurthy Thiagarajan, the operations director at Nakumatt Supermarket, said the retailer had not been able to buy enough stocks for its stores because of the dwindling supplies from local millers.
“We are hardly getting enough stocks these days because of shrinking supplies from the manufacturers,” said Mr Thiagarajan, adding that the shortage has partly been caused by the absence of Mumias Sugar Company from the market.
Nakumatt said most of its supplies are currently coming from two millers – Sony and West Kenya – whose stocks could not fully supply the prevailing demand.
Data from the Kenya National Bureau of statistics indicate that the consumer price of sugar has gone up by Sh5 per kilogramme in the last four months, from Sh104 in April to Sh109 last month.
The ex-factory price rose to Sh4,000 per 50 kilogramme bag from Sh3,600 in June. The AFFA is currently drafting regulations that would require all parties dealing with sugar to declare the stocks that they are holding every day in order to ascertain the volume of the commodity that is in the country to help for planning purposes in terms of sugar imports.
The troubled Mumias closed for maintenance last month and is expected to resume operations next week.
Mumias, which has been Kenya’s largest producer of sugar, has lately been weighed down by rising inefficiencies in its factory operations and huge losses of funds that have been blamed on mismanagement and theft of the company’s resources by past management.
Mr Busolo said the AFFA had convened a meeting with the millers this morning to discuss the inefficiencies that are threatening to create a severe shortage in the country.
The AFFA wants every miller to explain how it plans to improve the efficiency of its factories to avert a looming sugar crisis.
“Managing directors have to improve the operational efficiencies of their companies to meet their daily installed capacities,” he said.
Sony sugar managing director Jane Odhiambo said her stocks are below the normal operating levels because the factory only reopened in July after months of maintenance closure.
“It takes a while before the factory attains optimal daily capacity,” said Ms Odhiambo.
Sony had zero stocks by Friday last week, having produced 234 tonnes of sugar, against the daily installed capacity of 300 tonnes, according to the Sugar Directorate. The entire stock was sold at the weekend.
Nzoia Sugar acting managing director Godfrey Wanyonyi said obsolete machinery had left the factory with high levels of inefficiencies, making it difficult for the firm to meets its daily output obligations.
“We are unable to meet our daily capacity because of the obsolete technology we are using,” Mr Wanyonyi said, adding that he expects an improvement upon completion of ongoing replacement of the old machines and expansion of installed capacity.
The looming sugar shortage comes despite recent capacity expansion at Kisumu’s Kibos and Kakamega’s Butali Sugar, the two companies which have doubled their daily capacity from 1,500 tonnes to 3,000 tonnes of cane each.
The Kenya Union of Sugar Plantation Workers (KUSPW) has urged the Sugar Directorate to ensure that any sugar imports to meet the supply shortages are regulated to avoid flooding the market before Mumias resumes operation.
“We understand that there is a deficit of sugar at the moment but we want the imports to be well regulated to avoid causing a market glut,” said Mr Francis Wangara, the KUSP secretary-general.
Mr Wangara said the union had no problem with importation of sugar from Uganda but wanted full disclosure of the measures that have been put in place to ensure unscrupulous businessmen do not use the opportunity to ship in excessive amounts.
“We are not opposed to importation of sugar from Uganda. All we want to see is a proper plan that will ensure the sugar barons do not use the window to flood our markets with cheap imports,” the union said.
President Uhuru Kenyatta’s visit to Uganda two weeks ago during which he struck a deal with his Ugandan counterpart to allow sugar imports from the neighbouring country has sparked intense political debate that has seen Members of Parliament from sugar-growing regions accuse his Jubilee coalition of economic sabotage.
The union said privatisation was the only way to improve efficiency in the government-owned millers that are operating way below capacity.
The Privatisation Commission has so far approved the sale of the five State-owned sugar millers, bringing to a close a process that started nearly a decade ago.
The commission had proposed a detailed structure for the privatisation of the loss-making millers, setting the stage for injection of private funds and modern technology into the millers.
Kenya’s sugar industry has been reeling under the weight of high production costs and competition from cheap imports, most of which get in untaxed.
The commission has proposed that a strategic investor hold 51 per cent stake in the firms, out-growers (contract farmers) 24 per cent and the government 25 per cent.
The sugar companies lined up for sale are Nzoia, Chemelil, South Nyanza, Muhoroni and Miwani.
Kenya is a sugar-deficient country that depends on imports to bridge the supply shortage. East Africa’s largest economy imports 200,000 metric tonnes of sugar annually to plug the deficit. Kenya produces 600,000 tonnes of sugar against an annual requirement of 800,000 tonnes.
The Common Market for Eastern and Southern Africa (Comesa) gave Kenya a one-year extension of the sugar safeguards, continuing the decade-old limitation of sugar imports.
The safeguards are operating under the terms and conditions that Comesa gave Kenya in 2007 as a prerequisite for the extension.
The conditions include privatisation of State-owned mills, introduction of new early maturing and high sucrose content sugarcane varieties and paying farmers on the basis of sucrose content instead of weight.
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Calls for SADC to reinstate Tribunal
A coalition of 19 legal and human rights organisations has called on regional leaders meeting for the Southern African Development Community (SADC) summit in Gaborone, Botswana, on Monday to reinstate the SADC Tribunal which was effectively disbanded last year.
The Coalition for an Effective SADC Tribunal said the leaders should reinstate the tribunal to uphold the rule of law and human rights in the 15 member states of SADC. It complained that the SADC leaders had acted illegally a year ago, by adopting a new SADC Tribunal protocol which removed access to the Tribunal by individuals and legal persons and also removed its human rights mandate. This left the Tribunal with only the power to adjudicate disputes between SADC states.
This was illegal because the SADC Treaty – which is essentially the organisation’s constitution – requires that decisions concerning the SADC community and any affected persons or citizens must be made in consultation with them, the coalition said. The leaders hadn’t done that.
This had affected “every single citizen and person in the region”. ”The reinstatement would provide legal recourse to people seeking justice once they have exhausted existing legal remedies at the national level,” the coalition said.
“The disbandment of the old Tribunal and the adoption of the new protocol effectively disregards the independence of the judiciary, separation of powers and the rule of law. It also impacts negatively on human rights and business confidence across the region.
“We urge each SADC head of state to consider the merits of the SADC Tribunal in its original form and the positive impact it will have in the region – socially, economically and in terms of international best practice.” Last week, the Southern African Business Forum, (SABF) meeting for the first time on the margins of the SADC summit in Gaborone, also criticised the decision by SADC leaders to disempower the SADC Tribunal.
More than 100 business leaders of SABF said in their Savuti Declaration that “SADC has extensive plans for regional integration. The private sector of the region calls for the focus to now shift to implementation. Investors require legal certainty and failure by SADC member states to implement their regional obligations have serious implications for business. “The removal of access by private actors to the SADC Tribunal has reduced the legal remedies available to ensure legal compliance in SADC.”
SADC leaders moved to “neuter” the Tribunal, as some analysts have described it, after it ruled, in 2007 and 2008, that Zimbabwean President Robert Mugabe’s seizure of white farms violated the SADC Treaty because the decision discriminated against whites.
Meanwhile, former Malagasy President Marc Ravalomanana has appealed to the SADC leaders to re-instate his privileges and to restore his businesses in Madagascar which he lost after being toppled in a military coup in 2009. Last year, Ravalomanana returned to the Indian Ocean island state from exile in South Africa without the permission of the current government of President Hery Rajaonarimampianina and was quickly arrested. He was later released after interventions from the ambassadors of South Africa and other countries.
Ravalomanana has written to Botswana President Ian Khama – who is taking over the SADC chair – to South African President Jacob Zuma and to SADC Executive Secretary Stergomena Tax.
He has pointed out to them that he has been denied the privileges which he is entitled to under the SADC roadmap which all political players in Madagascar agreed to, in an effort to end the post-coup crisis, and which has been incorporated into Malagasy law.
These include 12 permanent security guards, diplomatic passports for himself and his wife, a private house, a luxury car and an SUV, a fully-equipped residence or a housing allowance, a landline phone and a mobile phone, water and electricity supply and medical expenses. Ravalomanana wrote to the African Union earlier to say the government had only given him the 12 security guards and diplomatic passports for himself and his wife but none of the other privileges.
However, in his letters to Khama, Zuma and Tax, dated August 14, he said that recently the government had also taken away his security guards. Ravalomanana also complained that the Malagasy government had prohibited him from re-opening his family business – called TIKO – which had been destroyed during the 2009 coup. He said the government continued to block his radio and TV station MBS “with no legal and plausible explanation”.
In his letter to the AU, Ravalomanana had indicated that the government was preventing TIKO restarting because he had not paid his tax arrears. He said he had told the government he was willing to pay the tax arrears – but only after deduction of the compensation which was due to him under the SADC roadmap for the losses TIKO had sustained from being shut down.
“Overall, I am denied the right to actively and constructively participate in my country’s re-development,” he complained in the letters to Khama, Zuma and Tax.
“The government’s lack of political will to honour its commitments, whether to me or other constituents, indicates a systemic problem. The government may have legitimacy but it lacks credibility.”
He said the government’s lack of respect for its people’s rights had made Madagascar “the richest poor country in the world – richest in terms of being an island nation blessed with an abundance of natural resources, peaceful population and unique heritage, but poor in terms of ranking close to the bottom of virtually every wealth and human development index”.
SADC leaders are discussing Madagascar as a source of possible continuing instability at the summit. In May this year, the country’s Parliament impeached Rajaonarimampianina but the constitutional court overturned that decision. However, the president’s loss of Parliament’s support has added to Madagascar’s political volatility.
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Road upgrade to boost regional trade
Construction of northern corridor that has cost $440 million (Sh.44billion) will be completed in December giving a boost to trade between Kenya and landlocked countries of Uganda, Rwanda and Burundi.
According to Kenya National Highways Authority the multi-billion World Bank funded roads improvement under the Northern Corridor Transport Improvement Project (NTCIP) is geared towards facilitating movements of goods and services in the region.
The second component of the project is upgrade of airports and building capacity of Kenya Civil Aviation Authority which will take up $60million (Sh6billion) making the total project amount $500 million (Sh50 billion).
EASE CONGESTION
The Northern Corridor starts from the Port of Mombasa to Malaba border post, with Uganda and is expected to ease congestion of major roads along the corridor increasing efficiency of road transport facilitating trade and regional integration.
“So far rehabilitation works of Maji ya Chumvi-Miritini road, Sultan Hamud-Machakos Turnoff, Lanet-Njoro, Njoro Turnoff-Timboroa, Mau Summit-Kericho, Kericho-Nyamasaria, Nyamasaria-Kisumu Airport including the Kisumu Bypass and the ongoing rehabilitation of Kisumu Airport-Kisian Road have been done,” said acting general manager incharge of special projects at Kenha, Mr David Muchilwa.
Other facilities that have been improved are truck parking bay in Nyamasaria and Chepson.
FEASIBILITY STUDIES
Connecting feeder roads that include Kibwezi-Kitui-Mwingi-Maua-Isiolo road and Lakeside Tanzania-Narok road are also in line of construction with financing of consultancy services for the design and some of the reports have been submitted to Kenha.
The World Bank has also funded feasibility studies and preliminary designs of the Dongo Kundu bypass while Japan International Corporation Agency (JICA) has funded construction of bypass and the Kipevu New Container Terminal Link Road that commenced in May.
Consultancy services for the final designs of the Sudan Road Link which consists of Lesseru-Kitale-Marich pass, Marich pass-Lodwar and Lodwar-Nadapal have also been completed as a result of the Northern Corridor Transport Improvement Project.
ROADSIDE AMENITIES
Rehabilitation of major roads in Kisumu from Nyamasaria, via the Kisumu by-pass to end at the Kisian road junction and from Mau Summit-Kericho-Nyamasaria road has also benefited the town with ease of transportation of goods and services to various markets.
Road works of the projects are complete and have been taken over by Kenya National Highways Authority except for a few roadside amenities which are in progress. Works such as street lighting, road furniture, construction of footbridges and road drainage are ongoing and are expected to be complete by December 2015.
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As economic rivals invest in Africa, US shouldn’t sit on the sidelines
President Obama has left the continent. During his historic and inspiring visit to Kenya and Ethiopia, he announced several new initiatives and U.S. investments to improve the security and economic situation in Africa. The question is whether this focused American attention will last for years to come.
One thing is for sure: while American interest in Africa has waxed and waned, Chinese interest in Africa has only grown. American policymakers must face the fact that China supplanted the U.S. as Africa’s leading trading partner in 2009 and continues to strengthen its economic, political and military ties to the continent.
Quadrupling over ten years, China-Africa trade grew to $210 billion in 2013, the last year for which complete statistics are available, far exceeding the $85 billion in U.S.-Africa trade. More than 2,000 Chinese enterprises are investing in Africa, for a total estimated investment of $20 billion in 2012. For its part, the European Union (EU) is negotiating free-trade agreements with countries in sub-Saharan Africa, while Japan and India are making inroads as well.
With so many countries enhancing their investment and influence in Africa, the U.S. should not sit on the sidelines. From my perspective as a former monetary policymaker in the Democratic Republic of Congo (DRC), I believe I speak for many Africans when I say that the U.S. is our preferred economic partner. And the nations of Africa have much to offer the U.S.
As the home of eight of the world’s fastest-growing economies, Africa is a major emerging market. While much of the world has been mired in recession, the continent’s economies have grown by more than 5 percent per year.
According to recent estimates, consumer spending in sub-Saharan Africa will rise from $600 billion in 2010 to an anticipated $1 trillion in 2020. With China leading the way, foreign direct investment tripled from $15 billion in 2002 to $46 billion in 2012.
While China engages emerging African markets, the U.S. presence seems to be receding even in longstanding investment destinations such as DRC. The DRC once hosted major U.S. corporations such as General Motors, Goodyear, Gulf Oil-Chevron and Citibank, where I headed DRC operations almost two decades ago.
But Citibank has downsized its operations in DRC, while Chevron sold 82 percent of its shares to a French corporation. Together, the U.S. and Canada account for only 5 percent of DRC’s international trade, trailing the EU’s 23 percent and China’s 21 percent.
In an important bright spot, Phoenix-based Freeport-McMoRan, one of the world’s largest producers of copper and gold, has become the largest foreign direct investor in DRC, with facilities valued at $3 billion.
The United States should encourage more companies to establish a presence in DRC and other sub-Saharan African countries by working with the Corporate Council for Africa, the Export-Import Bank (if the U.S. Congress renews its charter), the Overseas Private Insurance Corporation and other institutions. The recent renewal of the African Growth and Opportunity Act (AGOA), providing preferred access to U.S. markets for some African products, is an important step forward.
In addition, the U.S. should increase its investments in African nations’ infrastructure. Developing countries such as DRC need roads and railways that will allow our economy to grow, move, exchange and expand. Doing so will also improve access to health care and to education, two factors that are central to economic growth.
Some 600 million people – 70 percent of the population of sub-Saharan Africa – are without electricity. The Obama administration’s Power Africa initiative, which seeks to marshal over $1 billion in private investment for geothermal and wind projects, is also essential. With its tremendous waterways and rivers, DRC is well-positioned to participate in this initiative.
Unlike the colonial powers of the past and some economic powers of the present, the United States is admirably concerned with developing Africa’s human and natural resources. From American universities partnering with their African counterparts to First Lady Michelle Obama’s initiative to help educate African girls, the United States has much to contribute.
Expanding economic and educational ties with Africa will strengthen the security of the United States and the entire international community. With the continent confronting threats from terrorism to human trafficking and ethnic conflicts, economic growth will avert the hopelessness that feeds extremist violence and will offer an alternative to harmful activities of all kinds.
Obama has made strides to strengthen the American relationship with the continent, where his father served as an economic policymaker. He must not lose sight of his goals in Africa for the rest of his term, and his potential successors should offer ideas for further strengthening of U.S. ties with the continent, where so much of humanity’s history will be made.
Mulongo has served as governor of the Central Bank of the Democratic Republic of Congo (DRC), as well as president of the G24 of the International Monetary Fund, deputy governor for the DRC of the World Bank, and president of the African Central Banks Association.
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Training Workshop on Trade in Services Negotiations for AU-CFTA Negotiators
Strengthening African services negotiation capacity
UNCTAD, in collaboration with the African Union Commission, is holding a training Workshop on Trade in Services negotiations for the officials/negotiators from the Member States of the African Union on 24-28 August 2015 at the Hilton Hotel in Nairobi, Kenya. This Workshop is aimed at capacity development of the AU Member States’ negotiators in the area of trade in services in order to support negotiations of the Continental Free Trade Agreement (CFTA).
The main focus of the Workshop will be to introduce the participants with importance of the trade in services in economy, potential for export of services in the region and globally, treaty obligations of AU Member States in the WTO General Agreement on Trade in Service and best practices for negotiating services in other regional trade agreements. Experiences in services development and liberalization of regional integration groupings in Africa like ECOWAS and COMESA also will be examined.
Experts from UNCTAD, AUC, WTO, FAO, TRALAC, ILEAP, Member States and other international experts will share their insights and experiences with the participants.
Background document
Building the African Continental Free Trade Area: Some suggestions on the way forward
African Union (AU) Trade Ministers will soon be confronted with a number of decisions regarding the formation of the African Continental Free Trade Area (CFTA). They would have to address, among others, the modalities of the negotiations, including their content and pacing, the trade and trade related issues to be included in the future CFTA agreement, the harmonization and coordination of the various trade agreements and negotiations to which African countries are parties, and the technical and financial support needed to move the CFTA forward.
In line with the 2012 African Union Summit Declaration on Boosting Intra-African Trade and the Establishment of a Continental Free Trade Area (CFTA), UNCTAD, UNECA and the AU Commission (AUC) have undertaken a series of studies to analyze the various aspects of the CFTA negotiations. The main purpose of these studies is to provide African Trade Ministers, the High Level African Trade Committee charged with CFTA issues, and trade negotiators with key insights and analyses on some of the CFTA most critical issues, thus assisting them in moving the CFTA negotiations forward in a meaningful manner.
This policy paper was prepared with the aim of submitting it for the consideration of the AU Trade Ministers at their meetings on the CFTA. It refers, firstly, to the challenges and opportunities of the CFTA; it then addresses issues such as the pacing of the various trade initiatives, in particular the strategic relationship between the Tripartite Free Trade Agreement (TFTA) and the CFTA; the specific content of the proposed CFTA; and the need for an effective and efficient mechanism to support the negotiating process and the implementation of the agreement once it enters into force. The paper concludes with some policy recommendations on these issues with the underlying premise that to multiply the benefits of the CFTA in the form of expanded markets for African goods and services, unobstructed factor movement, new investment opportunities and industrialization, an ample vision of trade, investment, finance and business facilitation needs to prevail.
This Paper was prepared with the support of Miguel Rodríguez Mendoza, former Deputy Director General of the World Trade Organization. UNCTAD gratefully acknowledges the useful contributions of the African Union Commission and UN Economic Commission for Africa to reports commissioned by UNCTAD on aspects of the CFTA that served as a basis for this paper.
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tralac’s Daily News selection: 17 August 2015
The selection: Monday, 17 August
Khama's SADC litmus test (Mmegi)
Today, an air of shock is expected at the SADC Council of Ministers' meeting when it is revealed that about 40% of the region lives below the bread line. The ministers will be informed that the latest African Development Bank and World Bank figures show that in some member states, four in five people live in extreme poverty. The ministers and the Heads of State, who start arriving on Sunday, will hear that the region is home to at least 17 million orphans and that child-headed households are on the increase due to HIV/AIDS and other diseases.
The Council of Ministers and the Heads of State Summit on Monday will also learn that the average unemployment rate in the region is 25%, ranging from nearly 50% in one country to as low as 2% in another. Unemployment among the youth, who are the worst affected, is more than double that of adults in the same predicament. Should technocrats hold back on the sugar-coating, the ministers and the Heads of State will hear how SADC's stated goal of eradicating poverty is drifting further away into an uncertain future. Progress on tearing down of borders and heightening regional economic integration have been slow and to date, numerous milestones, such as the formulation of a common external tariff and formation of a customs union, are still in the wind.
SADC finance ministers given task (Zambia Daily Mail)
The council of ministers of the 15-member Southern African Development Community states has directed the committee of ministers of finance to expeditiously finalise and operationalise the regional development fund to reduce dependence on external financing. SADC council of ministers chairperson Kenneth Matambo told journalists during a post-council media briefing here on Saturday that there is need for reduced external financial dependence if SADC is to survive the future years. “There is need to conduct a detailed research into various options of alternative sources of income while benchmarking with other relevant organisations such as the African Union and other regional economic communities,” he said.
Trade increasing among SADC Member States (SARDC)
On the SADC Regional Development Fund and Project Preparation and Development Fund, Gofhamodimo said a consultancy has been engaged “to look at issues of capitalization by different stakeholders, implications on shareholding in the fund”, as well as the appetite of the private sector to participate in regional development.
SADC needs $500m for strategic plan - Mozambican Foreign Minister (Club of Mozambique)
The Southern African Development Community is seeking to raise about $500m to finance implementation of its Regional Indicative Strategic Development Plan, according to Mozambican Foreign Minister Oldemiro Baloi. “The idea is that the contributions from the member states should not be used just to pay the wages of the organization’s staff, but also to finance implementation of regional development plans” said Baloi.
On the TFTA: “Not all the countries have joined this initiative”, said Baloi. “Mozambique did not join because we need to hold internal consultations and solve tariff questions. It’s no good joining just for the sake of joining. We have to defend national interests, because integration involves risks”.
Dr Leonardo Simao: 'Regional economic development and integration in the SADC region' (SADC)
A second reason explaining our slow motion in regional integrated development may be the lack of focus and sense of priority in member states. Indeed, many members of SADC are also members of other regional economic communities namely the East Africa Community and COMESA, but of SACU as well, with development agendas similar to the SADC one. In those member states, to elect the organization targeted to be the national priority attention is not easy, due to lack of internal consensus. Therefore, the adopted attitude is to let these organizations to run their natural course and competition in the national institutional environment, hoping that time will establish their true hierarchical order. This will eventually happen, but may take a long time and valuable opportunities for development may be missed.
SADC Council of Ministers: speech by Minister Simbarashe Mumbengegwi
Every year, our organization is confronted with the twin realities of an ever expanding list of responsibilities against a background of dwindling resources. We should, Honourable Ministers ask ourselves why we should continue to crowd our organization with institutions and programmes that we member states have no capacity to fund. We should concentrate on those programmes that have a direct bearing on regional integration and peace and security. We should not heap on SADC those programmes that Member States can implement on their own.
'SADC Success Stories' publication: remarks by Dr Stergomena Lawrence Tax
Packed agenda for the 35th SADC Summit
SADC: Take concrete steps to improve rights (Human Rights Watch)
SADC to tighten monitoring of shaky Lesotho (Business Day)
King to take over SADC Chairmanship (Swazi Observer)
The coalition for an effective SADC Tribunal (SALC)
AU-CFTA: Training workshop on trade in services negotiations for negotiators (UNCTAD)
The main focus of the Nairobi workshop, 24-28 August, will be to introduce the participants with importance of the trade in services in economy, potential for export of services in the region and globally, treaty obligations of AU Member States in the WTO General Agreement on Trade in Service and best practices for negotiating services in other regional trade agreements. Experiences in services development and liberalization of regional integration groupings in Africa like ECOWAS and COMESA also will be examined. Experts from UNCTAD, AUC, WTO, FAO, TRALAC, ILEAP, Member States and other international experts will share their insights and experiences with the participants.
South Africa: Jobs and South Africa’s changing demographics (World Bank)
South Africa could double its per capita income and eliminate extreme poverty by 2030 by generating jobs for its high and growing number of young workers, according to a recently released World Bank Group report. The report, South Africa Economic Update: Focus on Jobs and South Africa’s Changing Demographics, analyzes the complex challenges posed by changing demographics and its implication for jobs and labour markets. It explores the conditions necessary for the country to capitalize on its demographic transition by putting more of its working-age population to work to reap greater benefits from its historically high and growing working-age population. [Download]
Namibia: Trade deficit rockets 41.9% (Namibia Economist)
This week, the Namibia Statistics Agency reported that the trade deficit had spiked upward 41.9% in the second half of 2015 as measured against a comparative period in the second half of 2014, recording a deficit valued at N$9.85 billion in the second quarter of 2015. Commenting on the trade figures, Simonis Storm Securities analyst James Cumming said: "The widening trade deficit was mainly due to a decline in export revenue. The overall value of exports fell by 39%, which is 19% more than the decline in import expenditure, which fell by 20%. However, the fall in imports was not enough to offset the deficit." [Download]
Zambia: 'Our appetite for importing is very high' - Kalyalya (The Post)
In an interview after a media briefing last Tuesday, Dr Kalyalya said there was need to restrict imports to essential goods so as to contain the current scarcity of the foreign currency on the local market. “Our appetite for importing is very high [and] so, sometimes what we say is that when you have this adjustment in the exchange rate, when it depreciates, it’s also meant to moderate our appetite for foreign goods; If we can take advantage and produce some of those things locally,” Dr Kalyalya said. He said there was need to curtail the use of foreign currency in domestic transactions to reduce pressure on the foreign exchange market. “And that’s why we are talking about local transactions not being priced in dollar so that we don’t put unnecessary pressure on the market,” Dr Kalyalya said.
Kenya-Uganda trade policy issues: updates
Balancing trade: Uganda, Kenya sign bilateral framework on health, medicines (The East African)
How sugar barons arm-twisted state to accept imports (Daily Nation)
Uganda’s sugar turns sour in Kenya (Daily Monitor)
New Mumias boss to focus on winning back farmers (Daily Nation)
Bilateral deals could boost intra-EAC trade (New Times)
KRA reverses order on exports to EA bloc (Business Daily)
The Kenya Revenue Authority has reversed a directive compelling Kenyan traders to declare shipments to the east African market through its Simba system, ending a month of uncertainty. “All such goods will now be declared under the Single Customs Territory procedures only”, Mr Julius Musyoki, KRA’s acting Commissioner of Customs and Border Control, said on Friday.
NRZ volumes increase 150 percent (The Herald)
National Railways of Zimbabwe’s volumes have increased 150 percent since the beginning of the year spurred by an increase in raw sugar and coal production in the country. NRZ acting general manager Mr Lewis Mukwada told The Herald Business last Friday that there has been a growth in volumes since the beginning of the year with further uplift expected once chrome exports start. “The recent lifting of the ban on chrome ore exports is going to drive the company’s volumes and negotiations are in progress with different chrome companies. Since the beginning of the year we have started picking up in terms of volumes compared to last year’s performance where we were only moving less than 200 000 tonnes per month."
Power Africa Annual Report: second year in review (USAID)
Much of Power Africa’s initial achievements were due to its support of projects that were in development before our launch. Moving forward, we are focused on generating new deals to support, while continuing to ensure existing projects stay on track. In addition to the projects that have reached financial close, Power Africa has identified transactions in the planning stages with the potential to install more than 20,000 MW of cleaner power generation capacity in sub-Saharan Africa. [Download]
African trade partners feel the bite of China’s yuan devaluation
China’s in trouble; is that good or bad for Africa?
SA’s embargo on Ethiopian Airlines hurts Botswana
Reps investigate ban on Nigeria’s agricultural produces by EU
Fund standards bodies, ARSO urges African governments
China: 2015 IV Consultation report (IMF)
China is moving to a ‘new normal,’ characterized by slower yet safer and more sustainable growth. The transition is challenging, but the authorities are committed to it. They have made progress in reining in vulnerabilities built-up since the global financial crisis and embarked on a comprehensive reform program. With China now the globe’s largest economy, success is critical for both China and the world.
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South Africa Economic Update: Seizing the window of demographic opportunity
A new economic analysis shows that putting South Africa’s high and growing working population to work could push growth above 5% per year and double income
South Africa could double its per capita income and eliminate extreme poverty by 2030 by generating jobs for its high and growing number of young workers, according to a recently released World Bank Group report.
The report, South Africa Economic Update: Focus on Jobs and South Africa’s Changing Demographics, analyzes the complex challenges posed by changing demographics and its implication for jobs and labor markets. It explores the conditions necessary for the country to capitalize on its demographic transition by putting more of its working-age population to work to reap greater benefits from its historically high and growing working-age population.
“Job creation is South Africa’s most pressing challenge and this study offers analysis and evidence on how South Africa could harness its high and growing work population age to tackle this issue,” said Guang Zhe Chen, World Bank Group Country Director for South Africa, Botswana, Lesotho, Namibia, Swaziland, Zambia and Zimbabwe. “We hope it will promote informed dialogue and policy debate about these developmental challenges.”
Since 1994, the working-age population aged 15 to 64, has grown by 11 million, and comprises 65% of the country’s total population of 54.9 million in 2015. More than half of the working-age population is under the age of 25, and the working age population is expected to grow by another nine million in the next 50 years.
This transition presents South Africa with a “window of demographic opportunity” to increase growth, according to the report. But the dual challenge of high joblessness and low levels of employment is hampering South Africa’s ability to harness this opportunity.
South Africa has a high unemployment rate of 25%, compared to an average of 11% for upper middle income countries. One third of South Africa’s labor force is either out of work or not looking for jobs, a challenge that has arisen because of the low rate of job creation, the report says. Since 2000, the total number of jobs created fell far short of the growing labor supply, with only 2.8 million new, mainly service sector, jobs created as the working age population grew, according to the report.
In the same period, the report says, employment opportunities shrank in agriculture, mining and manufacturing, traditionally labor intensive sectors that employ unskilled workers. Together, these three industries now account for 19% of total employment, down from about 30% in 2000, while the services sector now accounts for 72% of total employment.
“The marked shift of employment opportunities toward skilled workers and services indicates it is critical South Africa improves its level of educational attainment, in particular the quality of basic schooling and post school training,” said Catriona Purfield, World Bank program leader for South Africa. “This is essential to adequately equip the millions of new young school leavers expected to join the working age population in the coming decades with the appropriate skills demanded by the evolving labor market.”
If the status quo in the labor market persists, the report notes that South Africa will not realize its potential and real gross domestic product (GDP) will grow by about 3.7% per year and real per capita income growth would average 3.1% per year between 2015 and 2030.
By comparison, the report shows that if some 5.8 million jobs are created over the next 15 years to absorb the new working age entrants and lower the unemployment rate by three quarters, and if labor productivity and educational attainment improves, real GDP growth could reach 5.4% per year, enough to allow income per capita to double in real terms by 2030.
The report notes that this higher economic performance can be attained by creating a virtuous circle of job intensive growth, improved productivity, higher savings and better education attainment particularly for the youth who will drive the growth in the working age population in the coming decades. The report underscores the importance of using vocational training to retool the long-term unemployed and unskilled and it encourages the private sector to provide internships and other practical training opportunities to help new entrants’ overcome their lack of work experience.
To stimulate firms to hire, the report recommends policies that will deepen global and regional integration in trade in goods and services and encourage the development of small and medium firms. To facilitate the emergence of small firms as an engine of job creation, the report points to the need to reduce the burden of red tape on such firms, as well as the importance of improving access to low-cost finance and securing greater flexibility in labor-market regulations that apply to these smaller firms.
Recent Economic Developments
As with previous editions, the Economic Update also provides a review of recent economic developments and assesses South Africa’s near-term economic prospects. Growth is stuck in low gear due to a combination of external headwinds arising from the fall in commodity prices and slowdown in the Chinese economy and important domestic constrains.
The report’s forecast for real GDP is at 2.0 percent in 2015, and envisages a slow strengthening to 2.4 percent in 2017. But overall, growth in South Africa will remain largely below the average growth rate of 4.2 percent and 4.0 percent for Sub-Saharan Africa, in 2015 and 2016-2017, respectively.
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Packed agenda for the 35th SADC Summit
The 35th SADC Heads of State and Government Summit set for 17-18 August in Gaborone, Botswana will deliberate on a wide range of issues, particularly on how southern Africa could fully benefit from its vast natural resources and improvement of the livelihood of its citizens.
According to the Southern African Development Community (SADC) Council of Ministers, which meets prior to the Summit of Heads of State and Government, discussions will mainly focus on advancing the industrialization agenda of the region.
Industrialization was identified by the last summit held in Victoria Falls, Zimbabwe in August 2014 as one of the critical enablers for SADC to achieve sustainable socio-economic development.
This is in realization of the fact that countries in the southern African region are getting very little in return from their natural resources since most of them do not have vibrant industrial bases that can allow them to add value to their resources before trading among themselves or exporting to other parts of the world.
To ensure that this industrialization momentum is maintained, the 35th SADC Summit will be held under the theme, “Accelerating Industrialization of SADC Economies, Through Transformation of Natural Endowment and Improved Human Capital.”
The theme continues the trajectory of the 34th Summit hosted by Zimbabwe, which focused on economic transformation and sustainable development through beneficiation and value addition.
“The proposed theme by Botswana takes forward the industrialization agenda,” new SADC Council chairperson, Kenneth Matambo said.
He noted that Council agreed to recommend to the heads of state and government when they meet on 17-18 August that all member states will now be expected to make progress reports in implementing the industrialization agenda at all future Council and Summit meetings.
Another key issue is on the Tripartite Free Trade Area (FTA) involving two other Regional Economic Communities (RECs), namely the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC).
COMESA, EAC and SADC jointly launched an enlarged market in June covering 27 countries in eastern and southern Africa.
The Tripartite FTA creates a combined population of some 600 million people covering half of the member states of the African Union with a total Gross Domestic Product of about US$1 trillion.
The enlarged market aims to promote the smooth movement of goods and services across borders, as well as allowing member countries to harmonize regional trade policies to promote equal competition.
A total of 16 countries have signed the agreement to establish the Tripartite FTA, eight of them from SADC – Angola, Democratic Republic of Congo, Malawi, Namibia, Seychelles, Swaziland, the United Republic of Tanzania and Zimbabwe.
The remaining countries requested more time to complete their internal processes before signing the document.
As such, the leaders set to come up with ways on how SADC as the current chair of the tripartite arrangement is able to facilitate the finalizations of negotiations on some of the outstanding areas still under discussions.
Linked to this is preparation for the launch of the Continental FTA. The SADC region has started negotiations for the launch of the Continental FTA set for 2017.
According to Matambo, the summit is expected to “advocate for a pragmatic approach to the establishment of the Continental Free Trade Area, building on progress achieved and lessons learnt at the REC levels and the Tripartite FTA”.
Other issues for the leaders will be the implementation plan and financing of the SADC Industrialization Strategy and Roadmap and the Revised Regional Indicative Strategic Development Plan (RISDP) 2015-2020.
The SADC Industrialization Strategy and Roadmap aims at accelerating the growing momentum towards strengthening the comparative and competitive advantages of the economies of the region, and is anchored on three pillars, namely industrialization, competitiveness and regional integration.
The Revised RISDP is a five-year plan that guides the implementation of all SADC programmes from 2015 until 2020.
Summit is also expected to approve the Draft Charter establishing the Aviation Safety Organisation as well as the Draft SADC Declaration on Youth Development and Employment. Both legal instruments were approved by Council when it met on 14-15 August.
The heads of state and government will also discuss the region’s political and socio-economic development issues. These include the political situation in Kingdom of Lesotho and the continuing instability in the eastern part of the Democratic Republic of Congo.
At the summit, President Seretse Khama Ian Khama of Botswana will assume the rotating SADC chair from his Zimbabwean counterpart, President Robert Mugabe.
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African trade partners feel the bite of China’s yuan devaluation
For African countries that have bet heavily on China as their economic saviour, the sudden devaluation of the Chinese currency is a painful reminder of the risks of over-dependence on the Asian giant.
The devaluation of the yuan, coupled with a broader slowdown of the Chinese economy, is likely to weaken demand for the commodities that have spearheaded Africa’s booming trade with Beijing. It could also help Chinese manufacturers to compete even more ruthlessly against African producers as Beijing’s exports become cheaper.
China, hungry for minerals and oil, has rapidly gained dominance in African markets over the past decade. Its trade with Africa last year was more than $220-billion (U.S.), three times greater than U.S. trade with Africa. It’s the biggest trading partner of most African nations. But while this has helped spur African growth, it also leaves the region vulnerable to a slowdown or a devaluation.
Africa’s second-biggest economy, South Africa, felt the bite of the Chinese devaluation almost immediately last week. South Africa’s currency, the rand, fell to a 14-year low, and its stock market suffered heavy losses. It was a further blow to South Africa’s battered economy, plagued by electricity shortages, labour unrest, mining-sector decline and a manufacturing sector that has fallen into recession. Union leaders are threatening to launch crippling strikes in the gold and coal industries, while mining companies are planning to lay off as many as 11,000 employees because of rising costs and weakening commodity prices.
In addition to the damage wreaked on the rand last week, South African central bank governor Lesetja Kganyago warned that the Chinese devaluation will hurt South Africa’s exports. Analysts also warned of potential losses in the South African steel industry, which will find it more difficult to compete against cheaper Chinese steel exports in the future. The steel industry is already seeking a 10-per-cent tariff increase to protect itself against cheap imports, particularly from China.
President Jacob Zuma has assiduously courted Beijing in recent years, seeing China as crucial to his economic strategy. He and his top ministers have led two major trade missions to Beijing since 2010, while the ruling African National Congress has forged close links to China’s Communist Party. The ANC routinely praises Beijing’s economic policies – and even some of its political policies – as a model for South Africa.
China has become South Africa’s biggest trading partner, with $24-billion in annual trade. Most of the trade consists of South African raw materials and Chinese manufactured goods. This trade, however, could be threatened by the recent slowdown in China’s growth, and by the shifting nature of its economy, which is becoming less reliant on imported raw materials.
China had been fuelling a tourism boom in South Africa, with a dramatic rise in Chinese tourists visiting the country in the past several years. Yet this, too, has proven fragile. A controversial new reform of visa rules by Mr. Zuma’s government has led to a 38-per-cent drop in Chinese visitors to South Africa this year.
Despite the latest currency problems, China’s influence on African economies has generally been positive. Its companies are building railways, roads, airports, mines and oil facilities across the continent. But cheap Chinese exports have devastated industries such as South Africa’s textiles sector. And as commodities weaken, Chinese investors have become increasingly skeptical about Africa.
Cees Bruggemans, an economist in Johannesburg, expects the South African currency to follow the downward path of the Chinese yuan over the next year. He predicts that the rand will depreciate to about 14 to the U.S. dollar by late next year, compared to about 12.8 today.
“Companies worldwide deriving sales and earnings from their China trade may find themselves marked down,” he said in an analysis last week.
“The same treatment is likely to continue for commodities, especially those heavily dependent on Chinese demand and already experiencing supply gluts. Thus the slide in most commodity prices, including copper, iron ore, coal and oil, may not be over. This in turn has implications for commodity producers and emerging market currencies.”
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SADC launches success stories publication
The Southern African Development Community has launched a publication that documents some of the major successes achieved by the region over the past 35 years.
The SADC Success Stories publication, first of its kind in southern Africa, was launched by the SADC Executive Secretary Dr Stergomena Lawrence Tax on the sidelines of the ongoing 35th Summit of SADC Heads of State and Government in Gaborone, Botswana.
The publication presents some of the notable achievements of regional integration in various sectors such as trade, transport, finance, tourism, energy, disaster management, water resources, peacekeeping training and political cooperation.
This year marks 35 years since the establishment of SADC by the nine founding Member States in 1980. The number of countries has expanded over the years to 15, comprising 12 in mainland southern Africa and the three island states of Madagascar, Mauritius and Seychelles.
At its formation as the Southern Africa Development Coordination Conference (SADCC) in Lusaka, Zambia, in April 1980, the leaders of the region sought to demonstrate their vision of unity through the tangible benefits of working together.
“From this solid foundation, significant progress has been made to strengthen cooperation in various thematic areas, including the development of legal instruments and institutional arrangements to support the regional integration programme,” Dr Tax said.
She added, “In fact, pursuant to our regional integration agenda, SADC Member States have since 1992 signed 27 protocols and a number of declarations, charters and memoranda of understanding on various key areas, ranging from trade and investment, peace and security, to transboundary natural resources, as well as the empowerment of women and young people.”
Out of the 27 protocols, 24 have come into force so far after being ratified by two thirds of the signatory Member States and are at various stages of implementation.
“Although there is still a long way to go for the region to attain deeper regional integration, we believe that the implementation of these and other initiatives have improved the lives of SADC citizens,” she said.
It is against this background that the SADC Secretariat and its partners decided to document some of the successes of the regional integration programme.
“The launch of the Success Stories publication is testimony that SADC matters. It shows that SADC matters to the people,” said Germany Ambassador to Botswana, Rolf Ulrich, whose government supported the production of the publication.
He said the German government has supported SADC regional integration for the past 20 years and was ready to continue working with the region in ensuring that its integration agenda is successful.
The SADC Success Stories publication is intended to increase the public visibility of SADC, and to showcase some of the achievements and benefits of regional integration informed by the reality that SADC is not sufficiently well understood in terms of its mandate, programmes, activities and impact.
The publication was produced for SADC by the Southern African Research and Documentation Centre (SARDC), a longstanding research and knowledge partner of the Secretariat. The project was funded by the German Federal Ministry for Economic Cooperation and Development through the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ).
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Public Lecture on SADC Regional Economic Development and Integration
On August 6, 2015, SADC Secretariat and the University of Botswana (UB) co-organised a public lecture on Regional Economic Development and Integration in the SADC Region at the Library Auditorium of the University of Botswana.
The Lecture was delivered by former Minister of Foreign Affairs and Cooperation of the Republic of Mozambique, Dr Leonardo Santos Simão and the objective was to engender public discourse on economic development and integration in the region.
Dr Simão gave an overview of the history of the organization, explained the objectives of the initiators when they decided to create a regional organization. He also explained how and why it was changed from the Southern Africa Development Coordinating Conference (SADCC) to Southern African development Community (SADC). Addressing the students in attendance he said: “I hope to be investing in our future leaders, to be good leaders”.
Dr Simão was preceded by the Acting Vice Chancellor of the University of Botswana Professor Otlogetswe Totolo who, when welcoming the participants, expressed the importance that the University of Botswana attaches to SADC regional integration and development agenda. He also stated the importance for the region to use the SADC Industrialisation Strategy and Roadmap 2015-2063 to be launched during the upcoming Summit. “The region must, therefore build on this momentum and use the Strategy and Roadmap to transform our economies, to enhance economic growth, and thus create the much needed jobs to eradicate poverty”, he said.
Delivering the vote of thanks, SADC Executive Secretary, Dr Stergomena L. Tax stated. “In addition to disseminating information about SADC, the Public lectures also provide an opportunity for the public to interrogate the SADC regional integration and cooperation agenda, with the main target being intellectuals as well as students at institutions of higher learning in the hosting Member State”.
The lecture was organized in the margins of the 35th Summit of SADC Heads of States and Government that will be taking place in Gaborone from August 17-18, 2015.