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Power Africa Annual Report: Second Year in Review
Power Africa’s Annual Report highlights the progress the Presidential Initiative has made in its second year, the lessons learned, and the roadmap for the future. The report highlights achievements to date and progress made toward the new goals set by President Obama at the U.S.-Africa Leaders Summit.
African leaders are articulating their own vision to dramatically increase access to power on the continent. Power Africa is supporting this African-driven vision in practical ways aimed at delivering results. Power Africa’s approach focuses on partnership, driven by the private sector and supported by host country governments and multilateral and bilateral donors.
Large- and small-scale solutions for bringing cleaner, more efficient electricity generation capacity to sub-Saharan africa are all grounded in a new model of development that drives Power Africa. The core of this model is based on effective partnerships that link public and private sector goals and resources, and connect investors and entrepreneurs to business opportunities in Africa. Structured not from the top down, but laterally, with U.S. agencies, African governments, private sector actors, and other stakeholders serving as partners in the enterprise – Power Africa is delivering results.
Power Africa’s approach considers three related but distinct challenges to bringing that vision to life. power must be available, meaning sufficient megawatts must be generated to meet people’s needs. It must be accessible, so that even those communities that cannot be connected to national grids can still access electricity. And it must meet basic quality considerations, meaning natural resources and megawatts generated are efficiently managed to ensure optimal use.
Executive summary
In June 2013, President Barack Obama launched Power Africa – a partnership among the U.S. Government, African governments, the private sector, international organizations, NGOs, and bilateral and multilateral partners to double access to electricity in sub-Saharan Africa. In its first year, Power Africa made progress toward achieving its initial goal of adding 10,000 megawatts (MW) of power generation capacity and 20 million new connections in six countries in sub-Saharan Africa. To expand the reach of Power Africa, in August 2014, during the first ever U.S.-Africa Leaders Summit (ALS), President Obama announced a tripling of Power Africa’s goals – adding 30,000 MW and 60 million connections across sub-Saharan Africa. Alongside this announcement, the President pledged to support Power Africa at a new level of $300 million in assistance per year.
These new goals are ambitious but achievable. To accomplish them, Power Africa is expanding the markets it works in and the tools it offers. To date, Power Africa has assisted with the financial closure of transactions expected to install over 4,100 MW of new, cleaner power generation capacity when fully online. Power Africa has also made progress toward its connection goals. The additional 4,100 MW of power has the potential to enable approximately 4 million new connections through increased availability of power. Under Beyond the Grid, a Power Africa sub-initiative that drives private investment in off-grid and small-scale energy solutions, U.S.-Africa Clean Energy Financing facility (ACEF) and the U.S. African Development Foundation (USADF) have funded companies and projects expected to reach 1 million new connections.
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.
Generating new deal flow will be easier if certain conditions on the ground are met including opening the door for private sector investment in the energy sector and addressing many of the regulatory and financial constraints that have historically inhibited private sector investment. In Ethiopia, Power Africa and its partners are providing legal and technical transaction support to help the government advance its first independent power purchase agreement (PPA) with Reykjavik Geothermal and partners for the development of up to 1,000 MW of power at the Corbetti, Tulu Moye, and Abaya geothermal energy fields.
In Rwanda, Power Africa partner, Gigawatt Global, officially commenced operations of East Africa’s first ever utility-scale solar energy facility in February 2015 – 8.5 MW of gridconnected power (enough for 15,000 homes). The Solar Field at the Agahozo Shalom Youth Village, in addition to providing the grid with desperately needed power, is also directly benefiting a local community who now receive rental income from the solar facility’s land. In part due to critical early stage support from Power Africa, the project was negotiated and commissioned in slightly over one year’s time, demonstrating how quickly solar projects can get power on the grid. The transaction also helped build government capacity to negotiate power projects and increased government and private sector interest in additional projects. This solar field is the first project to come on line through ACEF, which is a key part of the Power Africa toolbox.
While Power Africa has made significant strides in the first two years, challenges abound, we are stressing the need for new financial models and critical reforms that will accelerate access to electricity. We support governments to make tough reforms and build their capacity so that they retain control of their country’s energy destiny in a financially and environmentally sustainable way. Whether it is enabling a private developer to tap wind resources to power thousands of homes in Kenya, or to help a woman in a rural village in Tanzania install a small photovoltaic solar panel on her roof, Power Africa is equipped with the tools to provide a wide range of support.
The private sector is leading the way. Power Africa’s over 100 private sector partners have committed more than $20 billion toward specific projects, including $1 billion in commitments under Beyond the Grid, our effort to ensure that people living in remote areas also get access to power. Success in mobilizing commitments has been possible because Power Africa has put people on the ground on the continent, who seek feedback from the private sector about the key impediments to their investments.
Power Africa’s experience over the last two years validates many of the reasons why it was launched. First, there are plenty of investors interested in the energy sector in sub-Saharan Africa, and there are a lot of great ideas for projects. But, there is a shortage of “bankable” projects. In the coming years, Power Africa will continue to help advance projects to the point of bankability through interventions such as facilitating the project’s financing and risk mitigation, and providing technical and transaction support to ensure the project is planned and negotiated with best practices. Second, companies see many opportunities for investment, and will quickly shift to other countries in Africa or even to other continents if one country is not willing to make the critical reforms necessary to attract and retain such investments. Third, there are sufficient renewable energy resources in Africa to power the continent many times over, yet there are many challenges in tapping this tremendous potential. Power Africa will work with our private sector and government partners to recognize and capture this potential in a low cost manner in order to promote rapid economic growth.
Working in partnership to overcome Africa’s energy deficit, Power Africa’s ultimate goal is to reduce poverty and improve lives by bringing power to health centers and schools, light to homes, and electricity to businesses.
Power Africa Delivering Results
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Transactions brought to financial close expected to generate over 4,100 MW of electricity
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Potential to power roughly 4 million new connections from increased availability of power plus an additional 1 million connections through ACEF and the Off-Grid Challenge funded projects
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$20 billion in private sector commitments from over 100 partners leveraged by an initial USG commitment of $7 billion – nearly 3:1 leveraging of funds
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The Government of Sweden committed $1 billion, adding to the World Bank Group’s commitment of $5 billion, and the African Development Bank’s commitment of $3 billion
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Reps investigate ban on Nigeria’s agricultural produces by EU
The House of Representatives on Thursday frowned at the ban on the exportation of some Nigeria’s agricultural produces for allegedly containing high level of unauthorised pesticides and lack of proper storage by the European Union.
Consequently, the House presided over by the Speaker, Hon. Yakubu Dogara in its resolution mandated its Committee on Commerce and Agriculture when constituted to liaise with relevant stakeholders to work on resolving the issues and concerns raised by the EU Food Safety Authority to lift the ban.
The resolution to ensure that EU lifts the ban on Nigeria’s agricultural food was sequel to the motion sponsored by Rep. Jerry Alagbaoso representing Orlu/Osun/Oru East of Imo State on the platform of the Peoples Democratic Party, PDP.
Alagbaoso had in the motion on the ‘need to investigate the ban of exportation of some Nigeria’s food items by the European Union’ noted with dismay that the recent ban by the EU on some agricultural food exports from Nigeria had affected the economy of the country.
He further noted that the reason given by the EU for the ban was that the banned food items allegedly contained high level of unauthorised pesticides, while others lacked proper storage, adding that the pesticides were usually applied when the products were being prepared for export.
The lawmaker also informed the House that the EU authorities had previously warned the Nigerian authorities that the banned items were hazardous and had issued about fifty notifications to relevant Nigerian authorities since 2013.
According to Rep Alagbaoso, the Director-General of the National Agency for Food and Drugs Administration and Control, NAFDAC, had blamed the exporters of those products of being responsible for the ban due to their non-compliance with regulatory requirements for semi-processed and processed commodities.
He said that he was “worried by the negative impact of the ban on the income of the farmers of those products and the middlemen who trade on them as well as the foreign exchange that accrues to Nigeria through those exports.”
He said that the matter was more worrisome because it was happening in an era when the federal government was working on diversifying the economy from oil-based to agro-based.
Meanwhile, the House also mandated its committee on Aids, Loans and Debt Management when constituted to undertake a comprehensive investigation of the debt profile of all tiers of government with a view to establishing their levels of compliance with and the need for invocation of section 41 (3) of the Fiscal Responsibility Act, 2007 and report back to the House within six weeks for further legislative input.
The resolution followed the motion sponsored by Rep Odebunmi Olusegun Dokun which had the title ‘Need to investigate the violation of Section 41 and 42 of the Fiscal Responsibility Act by all tiers of government on debt and indebtedness.’
Dokun had in the motion submitted that the Fiscal Responsibility Act, 2007 was enacted to ensure prudent management of the nation’s resources, assure long-term macro-economic stability of the national economy and secure greater accountability and transparency in fiscal operations within a Medium Term Fiscal Policy Framework.
He also noted that Sections 42 (1) (b), 42 (3) and 42 (4) of the Act make provisions for management of debt and indebtedness by all tiers of government in the country.
The lawmaker said adding he was disturbed that the rate at which governments at all levels go about borrowing both internally and externally was worrisome to the extent that those sections of the Act are being flagrantly violated in terms of borrowing, purpose of borrowing, terms of borrowing, the manner of approvals, setting of overall limits of the consolidated debts and other forms of violation and consideration for the current status of National income.
According to him, most of the states that are owing salaries to their civil servants and indebted to contractors were those that had borrowed heavily and now sucked into the vortex of debt repayment and servicing, since they did not envisage the current financial challenges.
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Kenya to become hub for intra-regional Africa trade
Infrastructure investments of $55.6 billion anticipated
Kenya is set to become a hub for intra-regional trade in Africa, according to a new report from Frost & Sullivan. An estimated $55.6 billion in investments in infrastructure development for Kenya is planned, the majority of which will focus on telecommunications and power generation infrastructure, according to the report.
Mega infrastructure projects are also planned for elsewhere in East Africa and are set to create unique opportunities and open new markets in Kenya, Uganda, and Ethiopia, the report said. Industry sectors expected to benefit from the planned infrastructure developments include oil and gas, mining, agriculture, and retail.
“Transport infrastructure has undergone major upgrades over the past five years in order to support the high trade demand in the East African region,” said Craig Parker, senior economic consultant at Frost & Sullivan. “The Nairobi Southern bypass, for example, was commissioned in 2012 and is already 40 percent complete.”
Major road projects that are currently underway were established to alleviate the severe bottlenecks and traffic congestion. An estimated $5.14 billion has been dedicated to road project investment in Kenya.
The Nairobi Southern bypass, a freeway in Kenya’s capital, is meant to ease congestion and increase speeds on local roads. The project was 85 per cent funded by China’s EXIM Bank; the Kenyan government provided the remaining 15 per cent.
However, disputes and illegal occupation of land in areas where infrastructure projects are underway, or are about to take place, have resulted in high relocation costs. This will culminate in delays along with escalating project completion costs.
Furthermore, legislative changes to the tendering process in Kenya have placed limitations on the type of projects international firms can get involved in. In order to address these challenges, and be accepted for infrastructure project tenders, global firms will be required to form local partnerships or joint ventures with domestic firms.
“Although private participation in infrastructure development is growing and tender processes are becoming more transparent, forging local partnerships will remain crucial for entering the Kenyan market successfully,” said Parker. “This explains the emergence of high priority public-private partnership programs, which boost the prospects of local construction companies and financial institutions that can offer finance to companies.”
Background
African Infrastructure Tracker: Kenya is part of the Financial Benchmarking in the Infrastructure Industry subscription, which will highlight planned logistics, transport, energy, ICT, water, health and education projects for Kenya and the East Africa region. This analysis will include investment values, planned project completion dates and a discussion on threats and challenges to project completion.
For complimentary access to more information on this research from Frost & Sullivan, please click here.
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Retreat of foreign investment from Africa means less looting: Gaming, naming and shaming ‘licit financial flows’
The less Africa sees of looting-oriented Foreign Direct Investment, the better.
“Foreign Direct Investment (FDI) is always prefaced with the two words ‘much needed,’” my colleague Sarah Bracking insisted this week at a Zimbabwe NGO conference. “Have you ever heard FDI referenced without those two words?” We all shook our heads. The FDI mantra is this century’s cargo cult.
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?
Our hosts – TrustAfrica’s ‘Stop the Bleeding’ project run by the indefatigable Briggs Bomba and Open Society’s fine regional staff – were refreshingly open-minded and indeed the case is increasingly obvious: the less Africa sees of looting-oriented FDI, the better.
The worst FDI tends to come solely in search of raw materials, but commodity prices have been crashing over the past year: oil by 50 percent, iron ore by 40 percent, coal by 20 percent and copper, gold and platinum by 10 percent. Far greater falls can be traded to prior peaks in 2011 and 2008.
Slowing FDI is promising in part because the so-called 2002-11 commodity ‘super-cycle’ appears definitively over, so extractive industry pressure will probably slow dramatically. Although traumatic job losses are on the cards – Anglo American last week announced a third of its South African mining jobs will soon be shed – that could also mean less financial looting of Africa. My argument to the conference proceeded through seven points.
Illicit Financial Flows
First, the category of so-called “illicit financial flows” (IFFs) reflects many of the corrupt ways that wealth is withdrawn from Africa, mostly in the extractives sector. These TNC tactics include mis-invoicing inputs, transfer pricing and other trading scams, tax avoidance and evasion of royalties, bribery, ‘round-tripping’ investment through tax havens, and simple theft of profits via myriad gimmicks aimed at removing resources from Africa. Examples abound:
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In South Africa, Bracking and Khadija Sharife did a study for Oxfam last year showing De Beers mis-invoiced $2.83 billion of diamonds over six years.
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The Alternative Information and Development Centre showed that Lonmin’s platinum operations – notorious at Marikana not far from Johannesburg, where the firm arranged a massacre of 34 of its wildcat-striking mineworkers in 2012 – has also spirited hundreds of millions of dollars offshore to Bermuda since 2000.
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The Indian mining house Vedanta’s chief executive arrogantly bragged at a Bangalore meeting how in 2006 he spent $25 million to buy Zambia’s Konkola Copper Mines, which is Africa’s biggest largest, and then reaped at least $500 million profits from it annually, apparently through an accounting scam.
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Zambian communities are this week in London courts trying to halt Vedanta’s KCM toxic pollution and at seven protest sites across the world last weekend, the vibrant Foil Vedanta movement showed how inspiring the networked transnational activists can be. The firm’s share price has fallen 61% this year and its critics can claim at least some credit.
The most profound analysis of IFFs at continental scale is being done by Burundian political economist Leonce Ndikumana, a professor at the University of Massachusetts-Amherst. He [has] presented his latest work on how Africa is both “more integrated but more marginalized.”
In addition to these tireless researchers and activists, there are also policy-oriented NGOs working against IFF across Africa and the South, including several with northern roots like Global Financial Integrity, Tax Justice Network, Publish What You Pay and Eurodad. IFFs represent one of those trendy linkage topics that give hope to so many who want Africa’s scarce revenues to be recirculated inside poor countries, not siphoned away to offshore financial centres.
The implicit theory of change adopted by the head offices of such NGOs often strikes me as touchingly naïve: i.e., they argue, because transparency is like a harsh light that can disinfect corruption, it is mainly a matter of making capitalism cleaner by bringing problems like IFFs to light.
To their credit, the NGOs and allied funders and grassroots activists generated sufficient advocacy pressure to compel the African Union and UN to commission an IFF study led by former South African president Thabo Mbeki. Reporting a few weeks ago, and using a conservative methodology, his estimate is that IFFs from Africa exceed $50 billion a year.
The IFF looting is mostly – but not entirely – related to the extractive industries. In an even more narrow accounting than Mbeki’s, the United Nations Economic Commission on Africa estimated $319 billion was robbed from 2001-10, with the most theft in metals, $84bn; oil, $79bn; natural gas, $34bn; minerals, $33bn; petroleum and coal products, $20bn; crops, $17bn; food products, $17bn; machinery, $17bn; clothing, $14bn; and iron and steel, $13bn.
From IFFs to LFFs
But second, even if IFFs were reduced, there’s another reason that FDI leaves Africa much poorer: what I term Licit Financial Flows (LFFs). These are legal profits and dividends sent home to TNC headquarters after FDI begins to pay off. They are hard to pin down but can be found within what’s called the ‘current account,’ along with trade.
So to find out, strip out trading: according to the International Monetary Fund’s (IMF’s) database, the last 15 years or so witnessed mostly evenly-balanced trade between Sub-Saharan African countries and the rest of the world, with a slight surplus (more exports than imports) from 2000-2008, and then a slight deficit, growing in 2014.
The current account measures not only whether imports are greater than exports, but also the flows of profits, dividends and interest. Africa had a fair balance (and even in 2005-08 a surplus) but since 2011 has rapidly fallen into the danger zone, with a current account deficit at 3.3% of GDP last year. The continent’s two largest economies – Nigeria and South Africa – are in especially bad shape – due partly to crashing mineral and oil prices in a context where TNCs take home way too many profits.
FDI in retreat
Third, the legal LFFs are volatile, no more so than Africa where FDI has fallen from its US$66 billion peak annual inflow in 2008 to a recent level around US$50 billion. That’s not only thanks to shrunken global commodities markets and the end of the Chinese growth miracle. The UN Conference on Trade and Development (Unctad) also records a sharp rise in ‘new national investment policies that are restrictive’ since 2001, though cargo-cult Africa has been slow to keep up with that trend.
Then there’s the overall problem of capitalist crisis as it appears in 2015: what we Marxist political economists term capital’s worsening ‘overaccumulation’, or glutting of markets. (Das Kapital spelled it out and David Harvey is the best guide.)
As a result, nearly everywhere, FDI is in retreat, with 16 percent less flowing globally in 2014 than in 2013, according to Unctad’s new World Investment Report. This is potentially very good news for those concerned that TNCs loot through LFFs, in Africa and everywhere.
Foreign debt explodes
Fourth, getting back to the danger zone in Africa, the current account deficit in turn requires that state elites attract yet more new FDI, so as to have hard currency on hand to pay back old FDI, or to take on new foreign borrowings so as to make payments on home-bound TNC profits and dividends. And since FDI is slowing, foreign debt is soaring. For Sub-Saharan Africa, what was a US$200 billion foreign debt from 1995-2005 (when G7 debt relief shrunk it 10 percent) is now nearly US$400 billion.
In South Africa’s case alone, the debt soared from the $25-35 billion range then to nearly $150 billion today, i.e. from 20% of GDP in 2005 to more than 40% now. The last time this ratio was reached was in 1985, and the result – thanks also to anti-apartheid activist sanctions pressure against foreign bankers – was that apartheid president PW Botha was forced to default.
Exploitation also comes from within Africa
Fifth, more nuance is important in terms which firms are doing the looting. It’s not just the Western TNCs, which looted this continent for centuries. The single biggest country-based source of FDI in Africa is internal, from South Africa.
In June, the South African Reserve Bank revealed that Johannesburg firms were in 2012-14 drawing in only half as much in profits (‘dividend receipts’) from their overseas operations as TNCs were taking out of South Africa. But that was a step-up from the 2009-11 period when local TNCs pulled in only a third of what foreigners took out of South Africa. It seems that Johannesburg companies have been busier looting the rest of the continent recently.
That’s not good news, because it means a dozen companies with Johannesburg Stock Exchange listings draw out excessive FDI profits: British American Tobacco, SAB Miller breweries, the MTN and Vodacom cellphone networks, Naspers newspapers, four banks (Standard, Barclays, Nedbank and FirstRand), the Sasol oil company and the local residues of the Anglo American Corporation empire.
Yet more public subsidisation of FDI?
Sixth, a threat to this pleasing trend of declining FDI, and hence less looting, is renewed and yet more frenetic mining. To this end, vast public subsidies may be pumped through the new ‘Program for Infrastructure Development for Africa.’ The donor-supported, trillion dollar project is mainly aimed at neo-colonial extraction of minerals and oil, and its transport along new roads, railroads, pipelines and bridges to new ports, along with electricity generation overwhelmingly biased towards mining and smelting.
If they materialize, subsidies of this sort will bring back the worst of the FDI, especially from BRICS countries like Brazil’s Vale mining (in Mozambique), Russia’s Rosatom nuclear (with its proposed $100 billion South African deal), India’s Vedanta and various Chinese firms – and the sub-imperialist Johannesburg firms.
Don’t believe the hype of BRICS as the source of Bandung-style South-South financial unity. A new book I’ve co-edited with Brazilian political economist Ana Garcia, BRICS: An anti-capitalist critique, highlights dangers of South-South super-exploitation which lubricates and relegitimates global-scale imperialism, including attraction of “much-needed FDI.”
Better public policies are needed
So seventh, we should reconsider the historic colonial-era bias of the continent towards extraction of non-renewable ‘natural capital’ – i.e., minerals, oil and gas (the exploitation of which leaves Africa far poorer in net terms than anywhere else) – given how the continent’s net wealth has been shrinking rapidly the last few years, even the World Bank admits in its Wealth of Nations series.
We should instead focus economic policies towards rebalancing, which might require:
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in the short term, reimpose exchange controls to better control both IFFs and LFFs, then lower interest rates to boost growth, audit “odious debt” before further repayment, and better control imports and exports;
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adopt an ecologically sensitive industrial policy aimed at import substitution, sectoral re-balancing, social needs and true sustainability;
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increase state social spending, paid for by higher corporate taxes, cross-subsidisation and more domestic borrowing (and loose-money “quantitative easing,” too, if necessary and non-inflationary);
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reorient infrastructure to meet unmet basic needs, and expand/maintain/improve the energy grid, sanitation, public transport, clinics, schools, recreational facilities and internet; and
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in places like South Africa and Nigeria rife with fossil fuels, adopt “Million Climate Jobs” strategies to generate employment for a genuinely green “Just Transition.”
It is a sound short-term economic strategy appropriate for what we might hope will be a post-FDI world. In Africa, the name Samir Amin – the continent’s greatest political economist and at 83 still going strong – has been associated with this sort of delinking strategy since the 1960s.
At least here in Zimbabwe whose ongoing economic plunge has roots in the 1990s crisis of neoliberalism, I would like to optimistically think that the resonance of these seven points is growing, as fast as the FDI is retreating.
Bond is based at the University of KwaZulu-Natal Centre for Civil Society and University of the Witwatersrand School of Governance.
A version of this article was originally published by teleSUR.
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tralac’s Daily News selection: 14 August 2015
The selection: Friday, 14 August
Featured infographics: The future of the world’s population in 4 charts (World Bank)
CFTA Soapbox: What legal format for the Continental FTA? (tralac)
While it is true that negotiations involving 54 states will be very challenging and that quick results are necessary in order to keep the momentum, there is no guarantee that negotiations about trade in goods will deliver a quick result; the exact opposite might happen. By starting with tariffs (and the concomitant rules of origin aspect), the quick results hoped for will not materialize. The TFTA process has taught us an important lesson; tariff negotiations between African States at different levels of development have become an extremely complicated matter. And regional hegemons are powerful players.
The TFTA negotiations, which involved only 26 countries, could not reach agreement on tariffs. After four years of negotiations the essential elements of a trade in goods agreement (tariff schedules and rules of origin) are still outstanding. What the CFTA process needs to avoid is the present TFTA dilemma. The TFTA Agreement has been signed but without the negotiations being concluded. [The author: Gerhard Erasmus]
Intra-REC trade and overlapping membership: review of COMESA, EAC and SADC (tralac)
This paper analyses trade between the three Regional Economic Communities (RECs) of the Common Market for Eastern and Southern Africa (COMESA), the African Economic Community (EAC), and the Southern African Development Community (SADC) using trade data from the International Trade Centre (ITC). The data is generally ranked by 2013 as that is the most consistently and seemingly comprehensive reporting available.
Examining each REC in turn we find that both Rwanda and Uganda export around half of their totals to COMESA, with DRC and Burundi around 20%, Zambia and Malawi around 15% and the rest below this figure. Libya with less than 0.5% is the outlier. Within the EAC, Kenya is the largest intra-EAC exporter with a share that varies around one-half while Uganda, Rwanda and Tanzania have similar shares of around 15% to 20%. Rwanda reports that some 72% of its exports were destined for EAC during 2013, but the data for other years varies significantly. As expected, South Africa dominates the intra-SADC exports with a share around 50% to 60%. [The author: Ron Sandrey]
SADC: a collection of Summit-related links
SADC Council of Ministers: remarks by O.K. Matambo (Botswana Government)
Malawi’s Mutharika will not attend SADC Summit (StarAfrica)
Malawi’s Nsanje Port not on SADC agenda again (Nyasa Times)
Socio-economic crisis grips SADC – churches (Mmegi)
SADC NGOs must be accountable - official (Nyasa Times)
SADC for the People, not corporations! Social Movements at the 2015 SADC Peoples' Summit (La Via Campesina Africa)
Angola works on SADC protocols membership (Angola Press)
Why Uhuru is keen on striking trade deals with Uganda (Business Daily)
President Uhuru Kenyatta’s latest deals with his Ugandan counterpart Yoweri Museveni, which have sparked heated political debate since his weekend trip to Kampala, were part of the Jubilee government’s effort to stop ongoing decline in Kenyan exports to its western neighbour. It was therefore not lost to keen observers of Kenya’s relations with Uganda that Mr Kenyatta would offer Kampala any sweetener that could culminate in Uganda removing some of the many barriers it has erected against Kenyan goods despite the political heat it was likely to generate.
EAC: various updates
EALA to debate Bill on regional electronic transactions (Business Daily)
EALA boosts integration process (Tanzania Daily News)
Tanzania not holding up talks on tourism - minister (IPPMedia)
COMESA Annual Research Forum underway in Uganda (COMESA)
The COMESA Annual Research Forum begun on Monday 10 to 14 August 2015 at the Laico Victoria Hotel in Entebbe. The main objective of the forum is to strengthen the participation of the government, leading policy research think tanks, academia and the private sector in regional integration agenda. Specifically, the forum will create an opportunity for sharing and discussing regional integration research findings. Further, the COMESA regional university will be discussed by various participating universities, Research areas emanating from the COMESA Summit of March 2015 will be shared and discussed and further areas of research which will be the focus of 2016 will be identified.
Central Banks staff trained to handle volatility in financial markets (COMESA)
South Africa: Presidential Business Working Group update (Agbiz)
On Friday, 7th of August, Business Unity South Africa (BUSA) and the Black Business Council (BBC) met with President Zuma, Deputy President Ramaphosa and Cabinet, as the Presidential Business Working Group. Dr John Purchase, CEO of Agbiz, formed part of the BUSA delegation. As an introduction, Government (Minister Rob Davies) presented on the state of the economy, while Mr Jacko Maree, who led the BUSA Delegation, responded with Business' remarks on the economy. The four Task Teams, viz.: education and skills; labour; regulatory impact; inclusive growth, reported on progress made with regard to their respective mandates. Government also emphasized their commitment to ignite economic growth and create jobs through the 9-Point Plan announced in the State of the Nation Address. In this Plan, "Revitalising agriculture and the agro-processing value chain" features as the top priority.
Extract from the Inclusive Growth presentation: Business and Government are at an advanced stage in developing the concept of the Inclusive Growth Implementation Agency (IGIA), to be modelled on the successful Business Trust. The IGIA will focus on effective implementation. It should comprise a lean executive, including associates, reporting to a Board made of government and business (incl. SOEs).
Operation Phakisa: President Zuma's implentation report (GCIS)
AGOA and South Africa: submission by Treatment Action Campaign, SECTION27, Doctors Without Borders/Médecins Sans Frontières, Stop Stock Outs Project to the out-of-cycle review on South Africa’s eligibility for benefits under the African Growth and Opportunity Act
28 top priorities to improve the ease of doing business in Mozambique (Club of Mozambique)
The dialogue between Mozambican private sector and the government which was formalised about two decades ago is about to enter a new phase with the signing of a memorandum of understanding to pursue priorities in improving the business environment in Mozambique identified by the two parties. In total, 28 priorities have been set, of which 22 were proposed by the Confederation of Economic Associations of Mozambique, with the other six identified by the government.
Dar’s current account deficit narrows 23% (Tanzania Daily News)
Tanzania's current account deficit narrowed 22.5% in the year to June, helped by a decline in oil imports and improved performance of tourism and manufacturing sectors, the central bank said. The gap narrowed to $4.091bn in the 12 months to June from $5.281bn in the same period last year, the bank the said in its latest monthly economic report. Imports of goods and services fell to $13.37bn from $13.96bn previously, while total exports rose by 9.4% to $9.39bn, the bank said. “The decrease in imports was mostly driven by a decrease in intermediate goods, particularly oil and fertilizers,” it said. Earnings from tourism, the east African country’s main foreign exchange source, rose to $2.19 billion from $1.97 billion previously due to more visitor arrivals, it said.
Transport and trade facilitation newsletter (UNCTAD)
This edition of the Transport and Trade Facilitation Newsletter includes, in this regard, innovations on trade facilitation from Cote d’Ivoire and Greece, while also presenting regional trade facilitation innovations, including working with parliamentarians in Africa and partnerships in Latin America and the Caribbean, among others. In this edition in particular, you will find articles on the intrinsic relations between transport, trade facilitation and development, as well as UNCTAD’s first regional office in Africa and the new UNCTAD liner shipping bilateral connectivity index and benchmarking, among others.
Africa Geothermal Centre of Excellence: update (UNEP)
Around 80 delegates, including representatives of 13 African countries, gathered in Nairobi to explore the feasibility of establishing the Africa Geothermal Centre of Excellence (AGCE), which would enhance the continent's institutional and infrastructural capacities, and create a critical mass of geothermal scientists and engineers. The two-day workshop will assess a feasibility study, which catalogues the region's needs for geothermal development, drafts the AGCE's vision and evaluates its long-term sustainability.
What drives local food prices? Is it world prices? Weather? Seasonality? Policies? Fuel prices? Other costs? (World Bank)
In a recently published working paper, What drives local food prices? Evidence from the Tanzanian maize market, we examine the factors driving movements of prices in 18 major regional maize markets in Tanzania. The results underscore the importance of measuring and accounting for the influence of domestic drivers of local food prices, such as harvest cycles and weather disturbances. They also find that while the main external market (Nairobi) exerts a small, but statistically significant, influence on maize markets in Tanzania, the effect is much less than that of South Africa or the US market, often considered the “world” price.
EU, Nigeria and fear of $2b revenue loss (The Nation)
Experts at conference organised by the London-based Africa Today believe this is a time for Nigeria and other African countries to collectively protect their own destiny. Olukorede Yishau examines the case for and against the EPA:
Almost all firms in developing countries have fewer than 10 workers, with the modal firm consisting of just the owner. Are there potential high-growth entrepreneurs with the ability to grow their firms beyond this size? And, if so, can public policy help alleviate the constraints that prevent these entrepreneurs from doing so? A large-scale national business plan competition in Nigeria is used to help provide evidence on these two questions. The competition was launched with much fanfare, and attracted almost 24,000 entrants.
Nigeria: Manufacturers demand intervention to meet 20% non-oil export target (BusinessDay)
SMEs should be innovative to expand businesses - EABC (IPPMedia)
Swaziland to eliminate barriers to ratification, approval of Tripartite FTA (Swazi Observer)
Ebola can be defeated by end of 2015, WHO chief tells UNSC (UN)
MDGs’ uneven success: Key gaps left unfilled (The East African)
ADB Chief Economist Shang-Jin Wei comments on depreciation of the renminbi (Asian Development Bank)
The World Bank is struggling with its own class divide (Washington Post)
China and the language of trade (Business Day)
This week in the news
Catch up on tralac’s daily news selections for the past week:
The selection: Thursday, 13 August 2015
The selection: Wednesday, 12 August 2015
The selection: Tuesday, 11 August 2015
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28 top priorities to improve the ease of doing business in Mozambique
The dialogue between Mozambican private sector and the government which was formalised about two decades ago is about to enter a new phase with the signing of a memorandum of understanding to pursue priorities in improving the business environment in Mozambique identified by the two parties.
In total, 28 priorities have been set, of which 22 were proposed by the Confederation of Economic Associations of Mozambique (CTA), with the other six identified by the government.
The memorandum, signed on Monday between the Minister of Industry and Commerce Ernesto Max Tonela and the president of the CTA Rogério Manuel during the first meeting of the business environment monitoring council, states that all the recommendations identified should be implemented by July 31, 2016.
On the private sector side, the major concerns related to the presentation by the Government of a proposal to amend the law establishing the Tax Code on Value Added Tax (VAT); approval of stimulus policies for agricultural production and productivity and the elimination of the fees and internal circulation orders for domestic agricultural products.
In the construction sector, the private sector has requested a review of Decree No. 15/2010 on public procurement, as a way of promoting greater access to state contracts for national companies and SMEs in particular. The CTA would like to see industrial policy and legislation about business communication reviewed, and the private sector raised the need for action aimed at restructuring coastal shipping (cabotage).
Meanwhile, the government recommends that the CTA contribute in combating tax evasion and tax avoidance, both to prevent unfair competition and increase state revenue.
In response to the frequent abandonment of construction contracts, the government has demanded that the private sector comply more strictly with state contract completion deadlines, and has proposed a platform for contractors to register to facilitate public procurement.
Other government proposals relate to the formalization of at least 100 operators currently in the informal sector. The need to create an association of insolvency administrators is another priority identified by the government.
The president of CTA, Rogério Manuel, said he felt that the signing of the memorandum would inaugurate a new phase in the public-private dialogue and that the parties had found a new way to solve their problems.
Manuel said he believed that if the issues raised got adequate treatment, Mozambique would rise in the World Bank’s Doing Business ranking.
In turn, the Minister of Industry and Trade said that the government had been working with CTA to find a dialogue mechanism from the beginning, and that it was in this context that the Prime Minister would coordinate the whole process.
“We adopted a five-year business environment improvement strategy in 2013, and one of its major components is contact with the private sector to hear its concerns about barriers that must be removed to facilitate corporate life,” Tonela said.
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EALA to debate Bill on regional electronic transactions next week
A Bill seeking to allow for seamless electronic transactions among EAC partner states enters a crucial phase next week when the regional Assembly resumes its sessions in Kampala.
The East African Community Electronic Transaction Bill 2014 will go through a second reading even as partner States target to deepen their economic ties through faster and safer ICT-based platforms.
“Top on the agenda during the two-week period are two key Bills which are expected to sail through the 2nd and 3rd readings respectively.
These are the EAC Electronic Transaction Bill 2014, and the EAC Creative Industries Bill 2015,” the bloc’s secretariat said ahead of next week’s session of the East Africa Legislative Assembly (Eala).
The Electronic Transaction Bill 2014 targets to encourage electronic-based transactions as a more efficient mode of linking both the private sector and governments in the region.
Most government regulatory procedures are expected to go electronic.
“The Bill further wants to promote technology neutrality in applying legislation to electronic communications and transactions and to develop a safe, secure and effective environment for the consumer, business and the governments of the partner States to conduct and use electronic transactions,” the EAC secretariat further said.
Eala has already undertaken a series of public hearings to source for stakeholders’ views on the Bill.
EAC countries are currently implementing a series of seamless systems, including a joint tax collection and cargo clearing system known as Single Customs Territory (SCT), to improve the flow of goods and reduce dumping.
Under the SCT deal, clearing agents within the EAC have been granted rights to relocate and carry out their duties in any of the partner states as part of a strategy to improve the flow of goods and curb dumping.
Importers of commodities covered under the SCT are required to lodge import declaration forms in their home countries and pay relevant taxes to facilitate the export process.
Joining the scheme
The tax authorities in the respective countries then issue a road manifest against the import documents submitted electronically by the revenue authority of the importing country.
Kenya, Rwanda and Uganda were the first to take up the SCT arrangement starting April 1, 2014 with Tanzania joining the scheme two months later.
Several commodities including steel, edible oils, confectionery and milk are currently traded between Kenya, Uganda and Rwanda under the SCT platform.
Cement, cigarettes and neutral spirits were the first products to be handled under the SCT scheme. Kenya and Tanzania in June expanded the list of items traded between them under the SCT, raising hope for improved flow of goods and reduced dumping.
» Download: East African Community Electronic Transaction Bill 2014 (PDF, 5.96 MB)
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Cracks emerge in Uganda-Kenya oil pipeline deal
Within hours of President Museveni and his Kenyan counterpart Uhuru Kenyatta’s agreement on the “least” cost Northern route for a joint crude oil export pipeline, cracks started emerging in the deal with Kenya contesting some of the pre-conditions set by Uganda, Daily Monitor has learnt.
A delegation that travelled with President Kenyatta during his three-day visit to Uganda, expressed concern on Monday over some of the conditions for the Shs17 trillion ($4.5 billion) oil infrastructure project during a meeting with Uganda's Energy minister Irene Muloni. The meeting was held at State House Entebbe immediately after the joint press conference by the two heads of state.
One of the conditions Kenya is contesting is guaranteeing upfront financing to the project and the attendant infrastructures, while the other is guaranteeing transit fees/tariffs not higher than any of the alternative routes which is still under discussion with the technical team back in Kenya.
Ms Muloni in an interview on Tuesday admitted that the Kenyan delegation contested some of the terms but added the cracks had been unplugged during the ensuing discussions. She described the divergence in opinions as a “case of misinterpretation” largely hinged on the wording in the communiqué that was read out.
“It is not like it was a misunderstanding but rather they were uncomfortable with some of the terms. The issue of financing was premature before we agree on the structure of the project in terms of ownership,” Ms Muloni said.
“But since we have now agreed to have the pipeline via the Northern route, technical teams from both sides will continue looking at all points detailing financing. Feasibilities for the project have been completed. Once we finish discussions on the structure, we will move into tendering and other processes at a later stage,” she added.
The pipeline
The 1,500km pipeline will run from Hoima through Lake Kyoga, northeast Uganda to Kenya’s Lokichar basin and later connect to the Lamu port at the coast. The feasibility studies for the project were conducted by Toyota Tsusho, a consulting and automobile Japanese firm and reports were submitted to both governments.
Ms Muloni further explained that since it is a joint project, they are trying to court neigbouring Rwanda (which is trying to develop capacity to exploit its methane gas reserves estimated at 55 billion cubic metres) and if possible DR Congo (which has vast hydrocarbon reserves) adjacent to Uganda’s Albertine Graben border line in the Southwest.
In comparison
Currently, Uganda’s oil volumes stand at 6.5 billion barrels from the 40 per cent acreage explored so far. However, these could hit the 8 billion barrels mark soon with additional discoveries. Kenya, on the other hand, in the early stages of exploration has confirmed only 600 million barrels.
The crude export pipeline is being advocated by the International Oil Companies-UK’s Tullow Oil PLC, France’s Total E&P and China’s Cnooc currently operating in Uganda. The infrastructure will supplement the 30,000 bpd oil refinery that government is seeking. The greenfield refinery, whose tender, has been awarded RT Global Resources, a consortium led by Russia’s Rostec, a defence and technology corporation, is also estimated to cost Shs15 trillion ($4b).
According to other terms under the pipeline project, Kenya will have to guarantee security on its side of the border, especially in the restive Turkana region where its oil deposits are located, and also guarantee expeditious implementation of the project.
Differing communiqués
Asked by this newspaper on Monday about the rationale for the pipeline, President Museveni said the issue of the pipeline is not about what Kenya decides. “Implementation will go on because they have already agreed with the IOCs. What we had to do first was to agree on the least cost route, then we can go into other discussions,” Mr Museveni said.
Kenya and Uganda have since put out communiqués regarding the matter but they largely differ in content. A statement issued by the Kenyan presidency does not include the pre-conditions which are contained in Uganda’s version.
A joint harmonised communiqué is not yet out pending further discussions on the matter.
The contention
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Guaranteeing upfront financing to the project and the attendant infrastructures.
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Guaranteeing transit fees/tariffs not higher than any of the alternative routes.
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M-Pesa and the rise of the global mobile money market
Most people probably don’t think of Kenya as an innovation and technology hub, but in 2007 it became the launching pad for M-Pesa, a transformative mobile phone-based platform for money transfer and financial services.
Since then, M-Pesa has undergone explosive growth: in 2013, a staggering 43 percent of Kenya’s GDP flowed through M-Pesa, with over 237 million person-to-person transactions. M-Pesa is nearly ubiquitous in the daily lives of Kenyans due to a range of services that include money deposit and withdrawal, remittance delivery, bill payment, and microcredit provision.
The idea that would result in the creation of M-Pesa was born after researchers funded by the UK’s Department for International Development (DFID), the foreign aid arm of the British government, noticed that Kenyans were transferring mobile airtime as a proxy for money. DFID researchers saw potential in this idea, and facilitated a connection with mobile service provider Vodafone. Vodafone had been considering ways to support microfinance through its mobile platform, as access to banking and credit was limited in Kenya and transporting cash was both risky and slow. Nick Hughes, Vodafone’s Head of Global Payments, developed the M-Pesa idea and applied for funding through a DFID challenge fund. Vodafone and DFID ultimately made matching investments of £1 million.
Nearly a decade after its launch, M-Pesa has transformed economic interaction in Kenya. Its success reshaped Kenya’s banking and telecom sectors, extended financial inclusion for nearly 20 million Kenyans, and facilitated the creation of thousands of small businesses. M-Pesa has been especially successful in reaching low-income Kenyans: new data indicates that the percentage of people living on less than $1.25 a day who use M-Pesa rose from less than 20 percent in 2008 to 72 percent by 2011.
Groups that typically have limited access to formal financial services have benefited from the financial products offered through M-Pesa. In particular, its short-term Pay Bill Account service allows users to fundraise for a variety of purposes, including expenses relating to medical needs, education, and disaster relief. M-Pesa has also empowered business creation – many small companies rely on M-Pesa for nearly all transactions, or provide a service that is a derivative of the platform itself.
In Kenya, M-Pesa has been so successful that traditional banks have come to see it as a serious competitor. At first, these banks sought to limit M-Pesa by seeking regulations from the Kenyan government, but increasingly they have begun to offer mobile banking services that attempt to disrupt M-Pesa’s monopoly of the mobile money market. To compete, many of these services are offered with transaction fees that are even lower than M-Pesa’s. As more players enter the system, the mobile money market may become even more widely accessible.
M-Pesa’s success is derivative of the explosive growth in access to cell phones in the developing world. In the first quarter of 2015, there were over 900 million mobile subscribers in Africa, and 3.7 billion in Asia. The number of mobile lines in service is projected to surpass the global population at some point this year, and developing markets will continue to drive growth in mobile subscriptions for the foreseeable future.
M-Pesa’s impact in Kenya put mobile money services on the map; today there are a number of successful mobile money services around the world that are similar to or resultant from M-Pesa. M-Pesa’s impact in Kenya put mobile money services on the map, and the subsequent proliferation of similar services can be credited to this success. According to the Global Mobile Systems Association (GMSA), approximately 255 mobile money services were operating across 89 countries in 2014. They are now accessible in more than 60 percent of developing markets. Sub Saharan Africa is the region where mobile money is most widely spread, followed by Southeast Asia and Latin America. A few of the most successful examples include:
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In the Philippines, Smart was the first to transfer person-to-person remittances beginning in 2000. By December 2007, 5.5 million Filipinos had used their mobile phones for personal finance, making the country a leader in mobile transactions.
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In Bangladesh, which is quickly becoming a global leader in mobile banking, BRAC Bank’s subsidiary bKash accounts for 80 percent of market share. Dutch-owned Bangla Mobile as well as MCash, launched by Bangladesh’s largest private bank, are expected to make significant contributions.
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In Pakistan, mobile banking is led by EasyPaisa, one of nine providers. Tameer Bank and Telenor Pakistan launched EasyPaisa in 2009, and with 7.4 million users it is now the third largest mobile money service in the world.
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In Afghanistan, the country’s largest telecommunications company Roshan launched M-Paisa in 2009 in collaboration with Vodafone and the Ministry of the Interior to pay police salaries using mobile money. Costs dropped by 10 percent as phantom payments to nonexistent police officers were eliminated and corruption was reduced. Now with over 1.2 million subscribers, M-Paisa’s success led other large telecommunications firms to launch mobile money platforms in Afghanistan in 2012.
The proliferation of mobile money services does raise the need for banking and telecom regulators to work together to allow these mobile platforms to work. As mobile money services continue to expand more proactive policies are required to ensure that the market can continue to grow and serve local consumers. Getting banking and telecom regulators to coordinate can be easier said than done, and this hurdle has slowed the adoption of mobile money platforms around the world.
While M-Pesa and other services like it do expand opportunity and financial inclusion, mobile transfers are not a complete answer to fully participating in formal financial systems. M-Pesa only allows for relatively small amounts of money to be stored and transferred via mobile phones and can’t substitute for opening a bank account or getting a loan for a small business.
By enabling users to transfer money to each other and make payments directly to businesses and service providers, mobile money platforms cut down on corruption by reducing the need to operate in a cash-only economy. As a result, M-Pesa’s empowers individuals and supports entrepreneurial creativity in a less constrained financial marketplace.
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Joint submission on the out-of-cycle review on South Africa’s eligibility for benefits under AGOA
Joint submission by the Treatment Action Campaign (TAC), SECTION27, Doctors Without Borders/Médecins Sans Frontières (MSF), and the Stop Stock Outs Project (SSP) on the out-of-cycle review on South Africa’s eligibility for benefits under the African Growth and Opportunity Act (AGOA)
12 August 2015
The Treatment Action Campaign (TAC) is a civil society organization based in South Africa that advocates for the rights and interests of people living with and affected by HIV and TB. SECTION27 is a public interest law center based in South Africa. Doctors Without Borders/Médecins Sans Frontières (MSF) is an international medical humanitarian organization that has programs based in South Africa and sub-Saharan Africa that primarily provide HIV and tuberculosis (TB) treatment to vulnerable populations.
The Stop Stock Outs Project (SSP) is a civil society coalition that seeks to ensure that all people have access to the medicines they require and to which they have a right by monitoring and communicating about shortages and stock outs of medication, and ensuring that transparency and accountability exists along the supply chain in public health facilities across South Africa.
TAC and MSF jointly formed the Fix the Patent Laws campaign in 2011to support South Africa in adopting critical flexibilities to protect health – allowed under the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (“the TRIPS Agreement”) and other international laws – into its national legislation. Fix the Patent Laws has since expanded to include 13 other health organizations, including SECTION27 and SSP, which support the needs of people in South Africa with regard to cancer, diabetes, epilepsy, mental health conditions, other non-communicable diseases, and sexual and reproductive health.
We welcome the opportunity to provide comments to the AGOA Implementation Subcommittee (“the Subcommittee”) of the Trade Policy Staff Committee, chaired by the Office of the United States Trade Representative (USTR), on the out-of-cycle review of South Africa’s eligibility for ongoing inclusion in the African Growth and Opportunity Act (AGOA), as required by the Trade Preferences Extension Act of 2015 (TPEA).
This submission aims to highlight the negative public health effect for people in South Africa if the AGOA out-of-cycle review of eligibility is used to pressure South Africa not to pursue pro-public health reforms of its national intellectual property (IP) legislation or to impose extraordinary IP standards beyond South Africa’s obligations under international laws.
Both the United States and South Africa’s governments agreed to the Doha Declaration on the TRIPS Agreement and Public Health (“the Doha Declaration”) as Members of the WTO, which affirms countries rights and obligations to adopt public health safeguards in implementation of TRIPS IP obligations. Commitments to supporting the protection of public health in the implementation of IP international obligations were also reiterated by both the United States and South African governments in the 2008 World Health Organization Resolution WHA 61.21 that adopted a Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property. Furthermore, the United States unilaterally committed to protect access to medicines and public health in its trade relations with sub-Saharan African countries when it adopted the United States Executive Order 13155 in May 2000.
An excerpt of the WTO Declaration on the TRIPS Agreement and Public Health (“the Doha Declaration”), November 20, 2001:
“We agree that the TRIPS Agreement does not and should not prevent members from taking measures to protect public health. Accordingly, while reiterating our commitment to the TRIPS Agreement, we affirm that the Agreement can and should be interpreted and implemented in a manner supportive of WTO members’ right to protect public health and, in particular, to promote access to medicines for all. In this connection, we reaffirm the right of WTO members to use, to the full, the provisions in the TRIPS Agreement, which provide flexibility for this purpose.”
An excerpt of the United States Executive Order 13155, May 12, 2000:
“(a) In administering sections 301-310 of the Trade Act of 1974, the United States shall not seek, through negotiation or otherwise, the revocation or revision of any intellectual property law or policy of a beneficiary sub-Saharan African country, as determined by the President, that regulates HIV/AIDS pharmaceuticals or medical technologies if the law or policy of the country:
(1) promotes access to HIV/AIDS pharmaceuticals or medical technologies for affected populations in that country; and
(2) provides adequate and effective intellectual property protection consistent with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) referred to in section 101(d)(15) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(15)).
(b) The United States shall encourage all beneficiary sub-Saharan African countries to implement policies designed to address the underlying causes of the HIV/AIDS crisis by, among other things, making efforts to encourage practices that will prevent further transmission and infection and to stimulate development of the infrastructure necessary to deliver adequate health services, and by encouraging policies that provide an incentive for public and private research on, and development of vaccines and other medical innovations that will combat the HIV/AIDS epidemic in Africa.”
This submission also responds to a submission made by the American Chamber of Commerce in South Africa (AmCham) on behalf of American companies operating in South Africa, which argues that South Africa’s eligibility to participate in AGOA must be contingent on South Africa abandoning certain IP law reforms. We note with deep concern that AmCham’s submission requests that the U.S. Government use this out-of-cycle AGOA eligibility review process as leverage to discourage South Africa from pursuing TRIPS-compliant policy reforms that are in line with the country’s national public health objectives and constitutional obligations.
Any attempt by the U.S. Government to impede South Africa’s progress towards adopting flexibilities to protect public health allowed under the TRIPS Agreement would threaten access to medicines and promotion of public health and undermine United States public health commitments to South Africa.
» Download the full submission below.
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MDGs’ uneven success: Key gaps left unfilled
When the final report on the Millennium Development Goals (MDGs) was released recently, UN Secretary-General Ban Ki-moon described the campaign as the “most successful anti-poverty movement in history,” because one billion people had been lifted out of poverty.
The ultimate agenda of the MDGs, adopted in 2000, was to “tackle the indignity of poverty” across the globe by 2015.
But while worldwide there were remarkable gains made on the eight goals, progress has been uneven across regions and countries, leaving significant gaps.
“Millions of people are being left behind, especially the poorest and those disadvantaged because of their sex, age, disability, ethnicity or geographical location,” notes the UN report.
In particular, sub-Saharan Africa lags behind the other developing regions on most targets.
Sipho Moyo, Africa executive director for ONE (an international campaigning and advocacy organisation), says the major reason for the region’s slow progress is the escalation of wars and conflicts, which disable human activities and divert funds that should have been invested.
“The UN must find concrete solutions to these conflicts for anti-poverty goals to be achieved,” said Dr Moyo. “It must bolster key-player nations that facilitate peace and reconciliation.”
On the first target of reducing by half the proportion of people living in extreme poverty (defined as the number of people living on less than $1.25 per day), for example, the UN reports that it was achieved globally five years ago, but in the region, more than 40 per cent of the population still lives in extreme poverty.
Notably, sub-Saharan Africa and South Asia had comparable rates (57 per cent and 51 per cent respectively) in 1990, but by this year, the latter’s had fallen to 17 per cent compared with the former’s 41 per cent.
However, sub-Saharan Africa has made the greatest progress in primary school enrolment among all developing regions.
“Its enrolment rate grew from 52 per cent in 1990 to 78 per cent in 2012. That is, from 62 million children to 149 million,” the report notes.
The developing regions have also achieved the target on eliminating gender disparity at all levels of education, with a parity index of 0.98 in primary and secondary education and 1.01 in tertiary education. The accepted measure of gender parity is between 0.97 and 1.03.
“However, significant differences remain across regions and countries, as disparities favouring either sex can cancel each other out when aggregated,” says the report.
With regard to wage employment, the proportion of women earning an income outside the agricultural sector has increased from 35 per cent in 1990 to 41 per cent currently, but gender gaps persist.
“Despite notable gains by women, significant gaps remain between women and men in the labour market. Women are still less likely to participate in the labour force than men,” says the report.
Barriers to women’s employment include household responsibilities and cultural constraints.
On the child mortality rate, though it is highest in sub-Saharan Africa, the absolute decline has been the largest over the past two decades, falling from 179 deaths per 1,000 live births in 1990 to 86 in 2015. The region, therefore, still faces an urgent need to accelerate progress.
Around the world, every minute 11 children die before celebrating their fifth birthday, mostly from preventable causes. Sub-Saharan Africa carries about half of the burden of the world’s under-five deaths – 3 million in 2015 – and is also the only region where both the number of live births and the under-five population are expected to rise substantially over the next decades.
“Reducing under-five mortality requires political will, sound strategies and adequate resources,” says the report.
On the healthcare targets, Amit Thakker, chief executive of Kenya Healthcare Federation says that in order to accelerate progress, there is a need to switch from disease cure to preventive measures.
“This will require intensified support to countries lagging behind and sustained effort in countries where progress is happening,” said Dr Thakker.
Maternal survival on the other hand has improved significantly since the adoption of the MDGs, dropping by 45 per cent worldwide between 1990 and 2013, from 380 maternal deaths per 100,000 live births to 210. Despite this progress, every day hundreds of women die during pregnancy or from childbirth-related complications.
Maternal deaths are concentrated in sub-Saharan Africa and South Asia, which together accounted for 86 per cent of such deaths globally in 2013.
Water on the other hand remains scarce, affecting 40 per cent of people in the world, and this scarcity is projected to worsen.
Global greenhouse gas emissions have been rising too, and the resulting likely impacts of climate change such as altered ecosystems, weather extremes and risks to society, remains an urgent, matter for the global community, according to the report.
Poor people’s livelihoods are more directly tied to natural resources, and as they often live in the most vulnerable areas, they suffer the most from environmental degradation.
As the globe prepares for the post-2015 development agenda, strengthening data production for use in policy making and monitoring are becoming increasingly recognised as fundamental means to development.
The MDG monitoring experience has shown that the effective use of data can help to galvanise development efforts, implement successful targeted interventions, track performance and improve accountability.
“Thus, sustainable development demands a data revolution to improve the availability, quality, timeliness and disaggregation of data to support the implementation of the new development agenda at all levels,” says the UN report.
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What Pan Africanism means in the context of regional integration
African people, both on the African continent and in the diaspora, share not merely a common history or heritage, but a common destiny. This sense of interconnected pasts and futures took many forms, especially in 19th century creating political institutions.
It is often said that Pan Africanism represents the complexities of black political and intellectual thoughts of over two hundred years.
It was on that note that Pan-Africanism was formed with calls for African unity, both as a continent and as a people, nationalism, independence, political and economic cooperation, and historical and cultural awareness around the world.
It was a refutation of the mindset that defined Africa and Africans from the perspective of the historical experience of slavery, colonialism and racial discrimination.
Pan-Africanism consolidated the complexities of black political and intellectual thought over two hundred years. It marked a clear rejection of the laughable fallacy that Africans did not have a history and it was more than just a search for our racial or geographical identity of Africans but an affirmation of the rich cultural heritage of African societies and the importance of achieving freedom and continental unity.
Since then the concept of Pan-Africanism has continued to evolvemeasured by the challenges and aspirations of the African continent. During the independence period, this ideology enabled Africans to overcome domination and oppression by ending colonialism and later apartheid in the continent.
It was a way the diaspora people of African birth and heritage living around the world maintained bonds with the continent through culture, politics, economics and family.
Decades have gone by with Pan Africanism facing turbulences of the present dynamic world where a few would afford a preserve of disassociating with their African roots while in diaspora; we have seen the onslaught of the western culture with incredible consequences. Our classic music genres like Jazz, Rhumba, just to mention a few, have been shelved.
Some go to the extent of shading off the beautiful black complexion in the name of bleaching to attain light skin. Our values, beliefs and practices have been subjected to the pressures of the other side of the world.
None the less, as this power of globalization continues to tear down the boundaries of our African-hood, many Africans are increasingly becoming aware of their own cultural, political, economic environment.
It is worthwhile to note that most of the African youth have so far been at the forefront, forging continental unity through cross-border travel in search of education, business or employment.
Additionally in this digital era, they have turned social media into a popular platform to interact and engage in African debates and share their ideas.
The inauguration Pan-African National Congress in Rwanda on 8th August that brought together Rwandans from various sectors of society: Academics, politicians, religious leaders, trade unionists, civil society, the private sector youth, women among others was a great ignition of the Pan Africanism spirit.
Pan-African Movement-Rwanda (PAM-Rwanda) was flagged off and followedby Pan-African Congress for Eastern Africa that was also launched in Nairobi thereafter. Rather than focusing only on identity, this ‘new’ pan-Africanism is also a call for democracy, good governance and economic development.
The renewal of this pan-African attitude is manifested through increased intra-African trade, increased exchanges within Africa’s universities, continent-wide calls for good governance and the ubiquitous and growing membership of pan-Africanist groups on online platforms.
Pan-Africanism reflects Africa’s conscious need for not only political independence, regional integration and the improvements of its living standards, but also the throwing of the shackles of economic bondage and democratic stagnation that had threatened to reverse the short lived prosperity of the independence era.
As East African Community, which is one of the pace setting regional blocs of the 21st century, require more of Pan Africanisms than ever. We need a common sense of belonging with a shared vision of prosperity to elevate ourselves climbing the rungs of economic prosperity.
“There is a lot to admire so far but still more is needed to go far.” Embracing our common goal is fundamental in realizing targets that have been set for the benefit of our people.
In conclusion, as someone said “let us all agree to die a little, or even completely so that African unity may not be a vain word”. That was the African spirit over fifty years ago. Real Pan-Africanism will result in tangible fruits of development, democracy and a real solidarity amid African countries. We have come a long way and must not relent the fight to have Africa of which we all have a pride in.
Oscar Kimanuka is a communications specialist and a part-time lecturer at both the Senior Command and Staff College and the Consultative Forum for Political Parties.
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tralac’s Daily News selection: 13 August 2015
The selection: Thursday, 13 August
Strengthening citizen participation on matters affecting regional integration in Sub-Saharan Africa (NANGO)
The SADC Treaty Article 16A provides for the creation of the SADC National Committees. The SNC is a multi-stakeholder platform at member states level responsible for the implementation of particular SADC programmes and also act as the vehicles for bottom-up policy-making within SADC. However, various independent studies and review processes have revealed that SNCs are the least functional SADC institutional structures and are non-existent in Zimbabwe. In view of this, NANGO and to some extent with the technical support of the SADC CNGO has embarked on a process to engage and lobby the government of Zimbabwe to formally constitute the SNC. NANGO gave a presentation on progress to date in lobbying for the operationalisation of the SADC committees, which was followed by thematic presentations by CSOs including:
Womens Coalition of Zimbabwe: SADC gender and development protocol - key issues for Zimbabwe
SADC CNGO: Progress of implementation of setting up of the SNCs within SADC
National Association of Youth Organisations: Social and human development issues in Zimbabwe and their regional implications
AFRODAD: Pertinent issues related to Trade, industry and investment in view of SADC regional integration
WIPSU: Womens participation in peace, defense and security issues
Zimbabwe Cross Borders Traders Association: Regional integration and informal economy.
Integrating the voice of CSOs in regional integration process - Eastern and Southern Africa (CUTS International)
Integrating the Voice of CSOs in Regional Integration Process - Eastern and Southern Africa is a project of CUTS Nairobi, through the support of Oxfam Novib under the Pan Africa Programme. The project is motivated by the need to guarantee CSO participation in the on-going initiative to bring 26 African countries from Cairo to Cape under one market. It is driven by the need to address a number of emerging issues/valid questions which have the potential of hindering the realisation of the objective of the Tripartite Free Trade Area which is to improve the lives of the people in the participating regions. These questions include: [Project www]
COMESA Business Visa: request for proposals (COMESA Business Council)
In March 2012, COMESA Business Council, representative of the private sector in the region, tabled before the Council of Ministers the need to have an interim solution for the movement of business persons in the region - through a common travel document for business persons known as the COMESA Business Visa. This will be an interim measure, as member states move towards the COMESA passport. The assignment will broadly cover the following focus areas: develop a project document that gives relevant background, justification, and operational scheme and budget for the implementation of the COMESA Business Visa scheme and develop a draft COMESA Business Visa instrument and operational scheme for validation. [Download]
Why is China investing in Africa? Evidence from the firm level (Brookings)
Using the firms’ transaction-level ODI data, the paper examines how Chinese ODI is distributed according to the recipient countries’ and sector characteristics. It finds that Chinese ODI is attracted to politically stable countries, but not necessarily those with good rule of law, consistent with what is found in the aggregate data. The paper also finds evidence that Chinese ODI is profit-driven, just like investors from other countries. Specifically, the cross-sector regressions show that Chinese firms invest in the more skill-intensive sectors in skill-abundant countries, but the less capital-intensive sectors in capital-abundant countries. These patterns are mostly observed in politically unstable countries, suggesting stronger incentives to maximize profits in tougher environments. Finally, the predominance of Chinese ODI in services appears to be related to host countries’ natural resource abundance, which is also consistent with the profit-driven nature of Chinese ODI. [The authors: David Dollar, Heiwai Tang, Wenjie Chen]
South Africa: Truck ban ‘not thought through’ (Business Day)
The Department of Transport’s proposal to ban trucks exceeding nine tonnes from public roads during peak hours has elicited a strong reaction from business. Such a change will also incur costs for consumers if implemented, as operators will be forced to put more vehicles on the road, according to the Johannesburg Chamber of Commerce and Industry. "The South African ports, which are already congested, would become gridlocked at a considerable cost to the national economy. In addition this will further reduce SA’s status as the preferred logistical gateway to the SADC region," says Warburton-McBride.
SADC in food deficit (Zambia Daily Mail)
All Southern African Development Community (SADC) member states except Zambia, Tanzania and South Africa will this agricultural season experience food deficit due to poor rainfall pattern caused by climate change. “The humanitarian outlook looks challenging. It is important to note that this year, availability of maize which usually makes up more than 75 percent of the total cereal production is forecast at 31.73 million metric tonnes compared to 36.79 million metric tonnes last year.”
SATUCC's Muneku: 'Endemic poverty, high unemployment Africa’s greatest challenges due to corruption' (The Post)
Endemic poverty and high levels of unemployment are the greatest challenges facing Africa due to widespread corruption and illicit financial flows, says Southern Africa Trade Union Co-ordination Council executive secretary Austin Muneku. Speaking in Gaborone on Tuesday when he officially opened a regional seminar on illicit financial flows from Africa and their negative impact on development, Muneku said massive corruption in many African states had led to the collapse of effective institutions of governance, thereby exacerbating illicit financial flows.
Uhuru hits back at Opposition over Uganda trade pacts (Business Daily)
President Uhuru Kenyatta has hit back at the Opposition for criticising his administration’s sugar and meat trade deals with Uganda, claiming that the opening of the local market to cheaper imports from the country is more cost-effective than sourcing it from overseas markets such as Brazil.
Charles Onyango-Obbo: 'What the Museveni-Kenyatta trade deal tells us about Uganda and Kenya' (Daily Nation)
Tanzania: 'Level playing field is needed for local cement producers' (IPPmedia)
Local cement manufacturers have said they are at the brink of collapse due to the continued influx of cheap imported products in an already saturated market. According to the Chairman of the Tanzania Chapter of East African Cement Producers Association (EACPA), Reinhardt Swart, the situation is made to be worse because they are competing with cheap imports at a time when their profit margins are squeezed by overcapacity in the market. "I am not asking for protection. I'm not asking the government to ban imports. I am asking for the government to create a level playing field," he said in a statement.
Uganda’s forex earning reduces by Shs113b (Daily Monitor)
Uganda’s current account balance has depreciated by $32m (about Shs113.280b) due to low export earnings. The current account balance is the difference between a country’s savings and its investments abroad. In its monetary policy report released on August 10, Bank of Uganda said: [Bank of Uganda June quarterly report]
Partnership to improve standards of African fish exports (The Fish Site)
WorldFish and the African Organisation for Standardisation (ARSO) have announced a partnership that will promote consumer confidence in African fish for domestic and export markets. The memorandum of understanding will allow the two organizations to work together on standards that will provide an Africa-wide framework for producers, distributors and sellers to ensure safety and quality at all stages of the value chain, from catch to the plate.
‘Strong African economies may lose out under CFTA agenda if dumping is not checked’ (The Guardian)
Following the conclusion of the President’s forum of the African Organisation for Standardisation, tagged “Africa Rises for Standards” in Abuja, the Director-General of the Standards Organisation of Nigeria and President of ARSO, Dr. Joseph Odumodu, in this interview with Femi Adekoya, unveils resolutions by ARSO to use its advocacy machinery to address challenges of standards harmonisation as well as dumping of sub-standard goods in the continent, especially in the face of African Union’s timeline for the Continental Free Trade Agreement (CFTA) agenda. Excerpts.
The role of standards in promoting sustainable agriculture, food security in Africa: opening remarks of the ARSO President (African Union)
Public debt sustainability in Africa: building resilience and challenges ahead (AfDB)
African policy makers need to adopt sound fiscal policies and complementary monetary policies, while pursuing growth-enhancing investment, including through borrowing. Caution should be exercised when approaching commercial debt markets though given the rising borrowing cost and possibility of shifting sentiments of investors. With low revenue-to-GDP ratios, many low income countries can reduce their debt through domestic revenue mobilization. They would also benefit from greater efficiency of public expenditures and medium term perspective in budgeting. Reducing inefficient spending (e.g., over-sized wage bills in Southern Africa, energy subsidies in North Africa) would create space for pro-growth outlays (support to SMEs, infrastructure, ICT) and discretion against shocks. Furthermore: [The authors: Mthuli Ncube, Zuzana Brixiová]
Kenya: Aid unpredictability and economic growth (AfDB)
Aid-Growth literature is awash with studies that either support or find no evidence for the importance of aid as a driver of growth. This study examines a related but different aspect of this debate; whether aid unpredictability has any positive or negative effects on economic growth.
Yuan devaluation threatens industries, good for imports (Business Daily)
TFTA: Africa’s crucial inflection point
Botswana to improve efficiency in cross border trade (Mmegi)
Angola to destroy 11m illegally imported eggs (The Herald)
We can learn a lot from China – Ramaphosa (News24)
Kenya to lift ban on biotech foods (Daily Nation)
Lesotho: EU calls for more trade (Lesotho Times)
Increasing trade with Africa to benefit Indian SMEs: UN body (SME Times)
Africa to be money spinners for Indian firms (Indian Express)
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CSOs expected to shape TFTA negotiations
CUTS-Nairobi held project inception meetings under ‘Integrating the Voice of CSOs in Regional Integration Process in Eastern and Southern Africa’ (IVORI-ESA) project in Nairobi on July 28, 2015 at Sarova Panafric Hotel; in Lusaka on July 31, 2015 at Grand Palace Hotel; and in Addis Ababa on August 04, 2015 at Jupiter Hotel.
In Nairobi, participants drawn from women cross border traders associations, micro and small enterprises authority, relevant policy makers on trade and regional integration, small-scale farmers associations, CSOs, the private sector and academia were briefed on the status of the Tripartite Free Trade Area (TFTA) by the Ministry of Foreign Affairs and International Trade. Participants were also briefed on the IVORI-ESA project design, methodologies and expected outcomes. The half-day meeting had fruitful discussions on the role and challenges of non-state actors, particularly civil society organisations, in regional integration within respective regional economic communities (RECs). Similar presentations and discussions were held in Zambia in partnership with CUTS-Lusaka; and in Addis Ababa in partnership with the Ethiopian Economics Association (EEA).
The Eastern and Southern Africa comprises more than 57% of the total population of the African Union (AU) with a combined GDP of US$ 624 billion; a GDP per capita averaging US$1,184; and make up half of the African Union (AU) in terms of membership. It also contributes over 58% to GDP of AU. The Tripartite process is anchored on three pillars, namely; Market Integration (Tariffs, Rules of Origin, Sanitary and Phyto-sanitary, Technical Barriers to Trade, Non-Tariff Barriers etc); Infrastructure Development (Transit corridors, Energy, Railway and Air Transport); and Industrial development (Competitiveness). While nnegotiations on the three pillars are running concurrently, Infrastructure Development has been an on-going process even before the Summit’s decision to move towards the Tripartite FTA. The Tripartite Summit directed that Free Movement of Business persons will be negotiated in parallel with trade in goods but in a separate track.
The principles guiding the TFTA process include: the negotiations to be REC and/or Member driven; Variable Geometry; Flexibility and Special and Differential Treatment; Transparency including disclosure of information with respect to application of the tariff arrangement in each REC; Building on the acquis of the existing REC FTA in terms of consolidating tariff liberalisation in each REC FTA; Single undertaking covering phase I on trade in goods; Substantial liberalisation; MFN; National Treatment; Reciprocity; and Decision be by consensus.
Currently, negotiations have been completed in all areas except in Tariff (offers) Liberalisation; annexes on Rules of Origin and Trade Remedies; Movement of Business Persons; and Modalities for Cooperation in Industrial Development.
Presentation on IVORI-ESA project by CUTS-Nairobi emphasised on the need to give voice to the voiceless. The TFTA initiative brings together 26 disparate countries in terms of, inter alia, economic growth, GDP per capita, poverty gap, high technology exports, food imports and exports, and depth of food deficit, the implication of which is that the TFTA presents both opportunities and challenges with respect to the composition of Member States. To ensure that the process results in improved living standards of people from all walks of life, it needs to involve CSOs that already have the machination, network and experience to reach out to the society and reflect views of the voiceless. Their proximity to the ground as well as society’s-watchdog perception best place CSOs as potential and integral part of any regional integration process.
Besides producing country and regional studies and designing of an ‘Engagement Framework and Action Agenda’, the project is expected to bring together CSOs from the 26 countries under an e-network dubbed Eastern and Southern Africa Civil Society Organisations Network on Integration and Development (ESACSONID) to serve as a platform for dialogue and information sharing on integration processes.
Discussions in relation to the role and challenges of non-state actors, particularly civil society organisations, in regional integration processes were more or less similar in the three countries. Stakeholders admitted that CSOs’ role in regional integration and more so in the TFTA process has been limited. It was indicated CSOs have to take a more proactive role in shaping negotiations outcomes. In all the three countries, it was mentioned that the involvement of CSOs during the Economic Partnership Agreement (EPA) negotiations was encouraging; however, along the way, they lost stamina perhaps due to protracted negotiations and limited resources. Policy makers, negotiators and REC representatives in the various meetings encouraged CSOs to be proactive in contacting their national governments to forward concerns and contributions based on solid evidence. So far, there is no mechanism put in place by the TFTA Secretariat to engage CSOs but it was indicated that national governments are expected to involve non-state actors, including CSOs, during consolidation of negotiation positions.
The half day meetings resulted in better informed participants in all the countries in terms of updates on the status and outstanding issues of the TFTA; as well as the IVORI-ESA project. Many expressed high expectation out of ESACSONID for better flow of information and dialogue.
» Learn more on the Project Website.
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The role of Standards in promoting sustainable Agriculture and food security in Africa: Opening remarks of the ARSO President
Opening remarks of the ARSO President at the 52nd ARSO Council Meeting, 10-11 August 2015, African Union Commission, Addis Ababa, Ethiopia under the theme “The role of Standards in promoting sustainable Agriculture and food security in Africa”
I am delighted to be here today for the 52nd ARSO Council coming soon after the successful 51st Council Meeting held in Harare Zimbabwe.
Ethiopia occupies a central position in the history of Mankind and for the Destiny of African. Ethiopia, the cradle of civilization, is a country with a long and storied history and the home of unparalleled natural beauty. Ethiopia has a proud history which can be traced to the beginnings of mankind. Among the most remarkable evidence of Ethiopia’s status as the cradle of civilization was the discovery of “Lucy,” a female hominid whose 3.2 million year-old skeleton was found in 1974 near the Awash River at Hadar.
Besides being the capital city of Ethiopia, Addis Ababa is also referred to as the capital city of Africa, It being the home to such prominent headquarters as the African Union and the United Nations Economic Commission for Africa. When we come to the lively city of Addis Ababa, it is not only the essence of Ethiopia that we will be able to capture but also the spirit of AFRICA, embedded in the Pan African drive for self-determination, freedom, progress and collective prosperity.
It is on the note that I welcome you all to this 52nd Session of the ARSO Council being hosted by the Government of the Federal Republic of Ethiopia here at the African Union Commission Headquarters, courtesy of the Department of Trade and and Industry.
The administrative function of the Council, in accordance with the laid down policies, is without a doubt essential to the success of ARSO and its activities.
On this note I would like to commend and thank the current Council members for their efforts made towards the attainment of the ARSO Mission and Vision through development and adopting the programmes and activities with regard to standards development and harmonisation to further the African Integration Agenda.
It is evident that with the increasing movement towards globalisation, the economic trends and patterns are also experiencing dynamic shifts. Africa has not been an exception since Intra-African and Inter-African trade has evolved greatly over time. Trade has had a significant impact on the political, economic and socio cultural development of African countries through generation of revenues, creation of larger markets, reduction of production costs, improved productivity and reduction of poverty inter alia. Trade has a particular edge as an economic activity due to its timeless nature as there is no state that can produce everything it and its citizens need within its own boundaries.
Realisation of optimal benefits of trade is highly dependent on putting mechanisms in place that govern the activities and ensure that no party has an undue advantage over the other. This forms the basis for the rationale behind the standardisation process. Through the active participation of nation states in standardisation actives through the use and implementation of standards, technical barriers to trade are eliminated and equal opportunities are created for all businesses and trading partners.
In this respect, the role of ARSO in development and harmonisation of standards in partnership with National Standards Bodies (NSBs) and other stakeholders is of immense relevance not only for the purpose of increasing trade levels but also for economic growth and the ultimate improvement of living standards for African citizens.
As you are all aware, the adoption of initiatives proposed by the Central Secretariat by the Council under the ARSO Strategic Framework 2012-2017 is crucial to the overall success of ARSO as an organisation. Such include, in the recent past the African Day of Standardisation Initiative under respective themes based on the African Priorities and as guided by the AU, Standardisation Essay Competition, ARSO Training and Capacity Building Programmes, the establishment of ARSO COCO and CACO progeammes, revival of the ARSO DISNET, the ARSO Standards Education Programme, The ARSO President Forum and the Made in Africa Exhibitions.
The ARSO Council members have taken the responsibility to go an Extra mile in various ARSO Council Committees which have specific Terms of Reference. Within the Strategic and Oversight Committees the Council members have truly and with dedication offered guidance and advice that have propelled ARSO further after the re-engineering of the Organisation.
The Committees contribute greatly to the success of ARSO through their concerted efforts in accomplishing their roles and responsibilities as delegated to them in line with the rules and regulations that govern ARSO.
The Establishment of the Free Continental Trade Area (CFTA) and deeper Continental integration and the vison 2063 are becoming. We must not lose sight of the role of ARSO in all these set blueprints for Africa and should therefore ever remain focused to deliver the mandate of ARSO in all these initiatives to revolutionise Africa’s position not only in the trade arena but in the global community as well.
Through the resolutions made herein and subsequent cooperation and support of ARSO activities we will be able to not only achieve our mandate but we will also have determined the path to Africa’s destiny and left a legacy for future generations to build upon and propel ARSO to greater heights and beyond vision 2017 and vision 2063.
I wish you fruitful deliberations and success in our endeavours.
Thank you.
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Endemic poverty, high unemployment Africa’s greatest challenges due to corruption – Muneku
Endemic poverty and high levels of unemployment are the greatest challenges facing Africa due to widespread corruption and illicit financial flows, says Southern Africa Trade Union Co-ordination Council executive secretary Austin Muneku.
Speaking in Gaborone on Tuesday when he officially opened a regional seminar on illicit financial flows from Africa and their negative impact on development, Muneku said massive corruption in many African states had led to the collapse of effective institutions of governance, thereby exacerbating illicit financial flows.
“According to the High Level Panel on Illicit Financial Flows from Africa by the Thabo Mbeki-led Panel, Africa is estimated to be losing US$50 billion yearly. In fact, the same report views this as an underestimate because of lack of accurate data from all African countries. At the same time, Africa, particularly the Southern African Development Community (SADC), is in dire need of resources for development as reflected in the dependency on Official Development Assistance (ODA) as resources from national budgets remain inadequate,” Muneku said.
He said illicit financial flows had devastating ramifications for the economies of Africa and the welfare of the masses through the erosion of the public sector, starving African states of the funds needed for development and driving up deficits for the states’ budgets.
Muneku said there was overwhelming evidence that multinational companies operating in Africa shuttle money and subsidiaries between countries to minimise taxes and at the same time, hiding stolen money in untraceable off-shore accounts.
“The monies being stolen from Africa through illicit financial flows could have been utilised to finance public service provision and efforts in the area of industrialisation towards creating decent jobs for our people. What is encouraging, however, is that governments and multilateral agencies around the world are waking up to this issue of illicit financial flows from Africa, and the pressure of transparency in financial reporting is also growing,” Muneku said.
He further said trade unions had no choice but to join the campaign to urge leaders and governments to adopt measures to curb the haemorrhaging of Africa’s resources while harnessing the same resources and investing them in the productive sectors of their economies to improve both living and working conditions on the continent.
And African Forum and Network on Debt and Development (AFRODAD) policy officer in economic governance Tafadzwa Chikumbu said African countries were in need of tax justice systems to curb illicit financial flows.
“A functional state that can meet the basic needs of its citizens must ultimately rely on its own resources to meet development objectives. We have a situation where our African states look at debt and aid as the most sustainable source of financing development but using a fair tax system, our governments can mobilise domestic revenue, distribute wealth and provide essential services and the much-needed public infrastructure. A functional state should have an efficient and effective tax system that builds a social contract between governments and citizens,” said Chikumbu.
IFFS in Southern Africa Research Methodology Workshop
Specific objectives of the workshop were to:
(i) Establish a common understanding of the focus, scope of work and modalities of implementation of the “Assessing the extent and impact of illicit financial flows in key economic sectors in Southern Africa” research initiative.
(ii) To strengthen the capacity of participants on illicit financial flows research methods and design.
(iii) To review individual proposals and provide inputs towards the development of final research proposals and timeframes.
(iv) Enhance the appreciation of the nexus between the political economy of Southern Africa and illicit financial flows.
(v) To strengthen connections and usefulness of academic research to advocacy efforts
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South Africa under pressure to implement US poultry trade agreement
South Africa must open its markets to US poultry or risk losing its benefits from the African Growth and Opportunity Act (AGOA), the president of the US’ National Chicken Council (NCC) has said.
Mike Brown delivered testimony at a hearing held by the Office of the US Trade Representative (USTR), as part of a congressionally mandated review of whether South Africa should be suspended from the recently renewed AGOA because of agricultural market access barriers.
Two members of Congress – Senator Johnny Isakson of Georgia and Senator Chris Coons of Delaware – have been in the forefront on this issue, and their efforts resulted in an amendment to AGOA’s renewal that requires this out-of-cycle review of South Africa. The amendment passed the Senate Finance Committee unanimously in late April.
“Congress has now demanded that South Africa change its ways and treat US products fairly, most especially US chicken,” Mr Brown said in his testimony.
“Unless South Africa makes significant progress in this regard, the law now requires the president to take action to limit, or even deny, further preferences.
“We want to express the profound thanks of our industry members to these two senators for their commitment to US producers and exporters, and to the principles of fair trade.”
Brown also took the opportunity to thank USTR, and our Ambassador to South Africa, the Honorable Patrick Gaspard and the fine team from his Embassy, for working with the NCC to try to find a way forward.
“With their help, we were able to reach an agreement in principle with the South African industry and government to reopen trade during meetings in Paris in early June,” Mr Brown said.
As has been publically announced by its Trade Minister, South Africa has agreed to an annual anti-dumping duty-free quota of 65,000 MT, that also allows for future growth.
Mr Brown stressed at the hearing that it is up to South Africa to take action.
“It is the South African poultry industry and the South African government that must take the actions necessary to implement the agreement that we achieved in Paris.
“The US industry is prepared to support those efforts and to participate to make sure the terms and conditions of quota administration are fair and effective; but the onus for eliminating the duties on the agreed 65,000 MT, for developing quota administration rules, and for establishing conducive sanitary rules are on South Africa.”
Mr Brown also said that the negotiations will not have been successful unless US imports are achieved.
“It is not enough to have reached an agreement in principle in Paris, or to initiate various legal processes in South Africa.
“In our view, South Africa will have only made the progress it is required to make under the AGOA renewal legislation when there are actual imports of US poultry moving into South Africa.”
Mr Brown concluded: “While Congress has now conditionally extended AGOA benefits to South Africa, its expectations are clear: South Africa must open its markets to US poultry or lose those benefits. South Africa is on the clock… we are watching and so is Congress.”
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Request for Proposals: COMESA Business Visa
The COMESA Treaty envisages a fully integrated, internationally competitive regional community within which goods, services, capital and labour are free to move across national borders. Additionally, COMESA has two Protocols on the Movement of Persons; on the gradual relaxation and eventual elimination of visas (1984) and the free movement of persons, labour, services, right of establishment and residence adopted in 2001.
However, due to various reasons the Protocols are not fully implemented and the movement of persons; particularly business persons, remains constrained to the detriment of trade and regional integration.
The COMESA Council Of Ministers proposed COMESA Common Travel Instrument for the movement of Business Persons, herein known as the “COMESA Business Visa.” In 2008 the COMESA Ministers responsible for Immigration discussed the proposal to have a Simplified Travel Document to support the movement of Persons in the region. The Meeting agreed that in principle such a simplified travel document could enhance the movement of people in the region.
In March 2012, COMESA Business Council, representative of the private sector in the region tabled before the Council of Ministers the need to have an interim solution for the movement of business persons in the region – through a common travel document for business persons known as the COMESA Business Visa. This will be an interim measure, as member states move towards the COMESA passport. Following which, The Thirty Second COMESA Council of Ministers meeting, 2012 endorsed the Decisions of the Fifth Meeting of COMESA Ministers Responsible for Immigration, and further made the following decisions:
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Council decided that the Protocol on the Free Movement of Business persons should be discussed with various sectoral committees before it is implemented;
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Council decided that the discussion on business passports/visas should be carefully re-examined especially that a business visa could suffice;
As a result, CBC has been tasked to work with COMESA Secretariat on the development of a business visa model to be presented to various consultative processes for adoption. This will be through an analytical study proposing the model instrument for the Business Visa and recommending the supporting framework necessary for its implementation.
Overall Objective of the Consultancy
The objective of the assignment is to develop a model instrument to facilitate the movement of business persons; herein named the COMESA Business Visa.
The assignment will broadly cover the following focus areas;
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Develop a project document that gives relevant background, justification, and operational scheme and budget for the implementation of the COMESA Business Visa scheme. The project document will include an assessment of the relevance of the business visa in comparison to other visas being issued.
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Develop a draft COMESA Business Visa instrument and operational scheme for validation.
Applications must be received on or before 17th August 2015 at 15.00 hours, Zambia time.
» Download the document below for more details.
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We can learn a lot from China – Ramaphosa
Deputy President Cyril Ramaphosa has called on South Africans not to scoff at the government’s close relationship with China because China was bound to be the biggest economy in the world and South Africa wanted to learn from the best.
Ramaphosa was answering questions in the National Assembly on Wednesday afternoon and had been asked about aspects and key outcomes of the bilateral discussions with the People’s Republic of China during his official visit to that country earlier this year.
Ramaphosa said the main purpose of his visit to China was to review progress made in the implementation of the Five-to-Ten Year Strategic Programme for Cooperation signed by President Jacob Zuma and President Xi Jinping, with specific focus on China’s experience in the management of state-owned companies.
“The trip was quite an eye-opener on a number of levels for many of us who participated in it because the success that they have achieved is quite phenomenal and their state owned-enterprises play a critical role in the development of their economy,” he said.
“There is much that we can learn from them and we intend to do so,” added Ramaphosa.
Ramaphosa said they discussed alignment of industries to accelerate South Africa’s industrialisation process, enhancement of cooperation in special economic zones, enhancement of Ocean Economy cooperation, infrastructure development, human resource and skills cooperation and concessionary finance.
He said among the key outcomes from bilateral discussions was a commitment from China to cooperate with South Africa in promoting industrialisation and improving our economic capacity and ability to create jobs.
This aims to enhance the capacity of the state to position SOEs to drive industrialisation and unlock private sector investment between the two countries.
“Some of the outstanding things that we learnt from them is just the mere management of the SOEs has been so well streamlined and it has to do with coordination. The coordination of their SOE is done through one central body that manages up to 111 SOEs.
“Their governance structure is something that we can learn from,” said Ramaphosa.
He announced that the Chinese were coming to this country to hold a workshop which will expose managers and executives from South Africa’s state owned enterprises to the Chinese experience.
This statement drew much heckling from the DA in the opposition benches.
“And I know that members on the other side are very dismissive of the China experience, and you do that at your own peril because China is bound to be the biggest economy in the world.
“On our side, we say we want to learn from the best and they are now running the best corporations in the world, corporations that you are accustomed to in the West are diminishing and diminishing in size and in value,” he said.
“So don’t scoff at the lessons that we can learn from China. We have a strategic relationship with China and we intend to exploit it to good effect because they have offered to assist us and they have not offered to dominate us and that to us is an important part,” said Ramaphosa.
Among the lessons learnt from the trip was the Chinese accountability process which Ramaphosa said was “fairly high”.
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SADC in food deficit
All Southern African Development Community (SADC) member states except Zambia, Tanzania and South Africa will this agricultural season experience food deficit due to poor rainfall pattern caused by climate change.
Director, food agriculture and natural resources at SADC, Margaret Nyirenda, told journalists here during a press briefing at the ongoing SADC summit that the weather has not been favourable in the region, resulting in very poor rainfall and in some cases floods and prolonged dry spells.
This, she said, affected crop production, especially maize which is a staple food.
Mrs Nyirenda said athough the three countries (Zambia, Tanzania and South Africa) will not have food deficit, they will all still fall below one million metric tonnes of maize at the end of the season as compared to past seasons.
“Agriculture, food security and prudent management of natural resources continue to be at the epicentre of the SADC region. To this end, the SADC region is cognizant of the increased number of vulnerable people who require both food and other humanitarian assistance,” she said.
Mrs Nyirenda said Zambia is at the top of the chart expecting to reap over 880,000 metric tonnes with Tanzania at 810,000 metric tonnes.
She said these countries will still need assistance with 798,948 people in Zambia requiring relief food.
At the bottom of the list of the countries with a poor yield in the region are Malawi with 2.8 million people requiring assistance and Zimbabwe with 1.49 million stalked by hunger.
In Namibia, 370,000 people will be in dire need of food assistance.
“The humanitarian outlook looks challenging. It is important to note that this year, availability of maize which usually makes up more than 75 percent of the total cereal production is forecast at 31.73 million metric tonnes compared to 36.79 million metric tonnes last year.”
“The total requirement for the region this year is estimated at 32.93 million metric tonnes, reflecting an overall maize deficit of 1.20 million metric tonnes,” Mrs Nyirenda said.
Mrs Nyirenda said SADC has not yet called for humanitarian assistance from outside the region although most individual countries have already begun to look far and wide for help.
“We wish to appeal to countries that have maize surplus to be generous enough and trade the extra to those lacking. This is part of regional integration,” she said.