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Africa50, a step change for infrastructure financing and development in Africa
Africa50, the new and innovative infrastructure investment platform promoted by the African Development Bank (AfDB) held its Constitutive General Assembly on the 29th of July 2015 in Casablanca, Morocco. Twenty (20) African countries and the AfDB have subscribed for an initial aggregate amount of USD 830 million in share capital.
These founding African countries are Benin, Cameroon, Congo, Djibouti, Egypt, Gabon, Ghana, Côte d’Ivoire, Madagascar, Malawi, Mali, Mauritania, Morocco, Nigeria, Niger, Senegal, Sierra Leone, Sudan, The Gambia and Togo. While this first closing was available only to African countries, it is anticipated that the second and subsequent closings will be available not only to African countries that are yet to invest in Africa50, but also non-sovereign investors both in Africa and outside Africa. The second closing is expected before the end of 2015.
Speaking at this historic event, Donald Kaberuka, President of AfDB and current Chairman of the Boards of Directors of Africa50, said “the large presence of African States and their financial commitments are a testimony to a shared vision to find new ways to accelerate the provision of infrastructure. Africa50 will be a step change for infrastructure financing and development in Africa”.
Africa50’s raison d’être is to mobilize long-term savings within and outside Africa for the financing of commercially viable infrastructure projects across Africa. Through an integrated approach, Africa50 will invest in African infrastructure projects at scale along the entire project finance value chain leveraging its innovative Project Finance and Project Development windows.
The strong expression of commitment by the African countries is a necessary first step towards attracting institutional investors, including sovereign wealth funds, pension funds, insurance companies and other sources of long-term finance around the world. Africa50’s medium term capitalization is projected to reach USD 3 billion.
During the Constitutive General Meeting, Africa50’s founding members signed the articles of incorporation, which enshrine the highest standards of corporate governance. Africa50 is headquartered in Casablanca, Morocco. A headquarters agreement was signed with the Kingdom of Morocco that confers upon Africa50 a range of privileges and immunities similar to those enjoyed by the African Development Bank. Other decisions taken at the meeting included the appointments of the members of the Boards of Directors of the Project Finance and Project Development vehicles and also the appointment of KPMG as external auditors.
The Minister of Finance of Morocco, Mohamed Boussaid, stated that Africa50 is an idea whose time has come and that the Constitutive General Assembly is an important first step towards making it a reality.
The newly elected Boards of Directors met after the Constitutive General Assembly and has launched the recruitment of the Chief Executive Officer of Africa50 through an international competitive selection process. In the meantime, the Board has appointed Alassane Ba as the acting Chief Executive Officer, as part of measures to immediately operationalize Africa50. Africa50 expects to start developing and financing projects before the end of 2015.
About Africa50
Africa50 is an innovative vehicle promoted by the African Development Bank and designed to help accelerate infrastructure development in Africa. Africa50 has two main operating windows: Project Financing and Project Development. Both are incorporated in Casablanca, Morocco and enjoy certain privileges and immunities. While adopting a strong public private sector approach in the development of its business, Africa50 is founded on the highest of corporate governance, ethical, financial, environmental and social responsibility frameworks. For more information please visit: www.africa50.org
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Momentum gathers for international agreement to combat rogue fishing
FAO assists countries in implementing the ports accord on illegal, unreported and unregulated fishing
A growing number of countries are ratifying an international agreement to combat illegal fishing, fueling interest in how best to implement the instrument.
Illegal, unreported and unregulated (IUU) fishing is estimated to strip between $10 billion and $23 billion from the global economy, and their impacts undermine the way fish stocks are managed to make it a double concern around the world.
To help tackle the problem, FAO brokered the adoption in 2009 by its Member countries of the Agreement on Port State Measures to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing.
The agreement comes into force when 25 countries have deposited their instrument of ratification, known as acceptance of accession; so far, 12 countries have done so, the latest being Iceland in June. Two more states will soon join them.
“Port state measures” generally refer to actions taken to detect illegal fishing when ships come to port.
The Agreement promotes collaboration between fishermen, port authorities, coast guards and navies to strengthen inspections and control procedures at ports and on vessels. Importantly, it also allows states to prevent the landings of catches derived from IUU fishing by vessels regardless of the flag they fly.
“The Agreement aims to harmonize port controls in order to prevent illegally caught fish from ever entering international markets through ports,” said Blaise Kuemlangan, Chief of FAO's Development Law Service. “The ability to turn away vessels taking part in IUU fishing will greatly reduce opportunities for selling their catch, decreasing IUU fishing worldwide,” he added.
The Agreement will enable better compliance with the 1995 FAO Code of Conduct for Responsible Fisheries, which seeks to promote the long-term sustainability of the sector.
Illicit fishing, which includes operating without authorization, harvesting protected species, using outlawed fishing gear and violating quota limits, may account for up to 26 million tonnes of seafood a year, more than 15 percent of the total global output. Besides economic damage, it poses risks to local biodiversity and food security in many countries.
Workshop for coastal African countries
To assist countries in building their capacity to implement the Agreement, FAO has convened a series of workshops in all world regions.
The sixth in the series, funded by the Government of Norway and covering West Africa, ran this month in Praia, Cabo Verde. Fifty participants from 16 African coastal countries took part, along with experts from the European Union, the International Maritime Organization, the North East Atlantic Fisheries Commission, the International Commission for the Conservation of Atlantic Tunas, the COMHAFAT Ministerial Conference on Fisheries Cooperation Among African States Bordering the Atlantic Ocean, the Pew Charitable Trust and the WWF.
“Fighting illegal, unreported and unregulated fishing is a key priority along the Atlantic coast of Africa, where IUU fishing contributes to overfishing, creating negative effects for the economies of these countries,” said Remi Nono Womdim, FAO Representative in Cabo Verde.
Gabon is the only local country to have ratified the Agreement, but several others are close to completing the process.
“Many countries in the region have the will to address IUU fishing, but require the most cost-effective tools and an understanding about how these can be implemented at the legal, policy and institutional level,” said Womdim.
Ratification of the treaty requires countries to designate ports that foreign vessels can use and to block entry to ships known or believed to have been involved in IUU, as well as share information with other governments of vessels discovered to be carrying an IUU catch.
In addition to Gabon, signatories that have completed the ratification process are Chile, the European Union, Iceland, Mozambique, Myanmar, New Zealand, Norway, Oman, the Seychelles, Sri Lanka and Uruguay.
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Amid ‘steady rise’ in rhino poaching and elephant killings, UN urges action to tackle illegal wildlife trade
Recognizing that wild animals and plants are an “irreplaceable part of the natural systems of the Earth,” the United Nations General Assembly on 30 July urged its Member States to take decisive steps to prevent, combat and eradicate the illegal trade in wildlife, “on both the supply and demand sides.”
Through the new resolution, the Assembly expressed serious concern over the steady rise in the level of rhino poaching and the alarmingly high levels of killings of elephants in Africa, which threaten those species with local extinction and, in some cases, with global extinction.
“Illegal wildlife trafficking not only threatens species and ecosystems; it affects the livelihoods of local communities and diminishes touristic attractions. It compromises efforts towards poverty eradication and the achievement of sustainable development,” said the President of the 69th session of the Assembly, in remarks read by Vice-President Denis G. Antoine.
Adopting a consensus text resolution, the 193-Member body encouraged Governments to adopt effective measures to prevent and counter the serious problem of crimes such as illicit trafficking in wildlife and wildlife products, including flora and fauna and poaching.
The resolution suggests “strengthening the legislation necessary for the prevention, investigation and prosecution of such illegal trade, as well as strengthening enforcement and criminal justice responses, acknowledging that the International Consortium on Combating Wildlife Crime can provide valuable technical assistance in this regard.”
The General Assembly also calls upon Member States to make illicit trafficking in protected species of wild fauna and flora involving organized criminal groups a “serious crime.”
Member States are equally encouraged to harmonize their judicial, legal and administrative regulations to support the exchange of evidence, as well as to establish “national-level inter-agency wildlife crime task forces.”
“The adoption of this resolution today and its effective implementation will be crucial in our collective efforts to combat illicit trafficking in wildlife worldwide,” adds the President’s statement.
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Communiqué on the Regional Conference on Building Democratic Developmental States for Economic Transformation in Southern Africa
Preamble
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The Regional Conference on Building Democratic Developmental States for Economic Transformation in Southern Africa was organised by the United Nations Economic Commission for Africa – Southern Africa (ECA-SA), United Nations Development Programme – South Africa (UNDP-SA), Southern Africa Trust (the Trust), and the Open Society Initiative for Southern Africa (OSISA). The Conference took place from 20 to 22 July 2015 at Kievietskroon Country Estate, Pretoria, South Africa.
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The opening ceremony was moderated by Said Adejumobi, ECA, Director of Sub-regional office for Southern Africa with the opening remarks by Gana Fofang, UN Resident Coordinator and UNDP Resident Representative in South Africa. Partner organisations also made opening remarks. Statements were read by Tiseke Kasambala, Deputy Director, OSISA, and McBride Nkhalamba from the Trust and Said Adejumobi from UN-ECA.
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Participants from the following countries attended the Conference: Botswana, Ethiopia, Kenya, Malawi, Mauritius, South Africa, Zambia, Ethiopia, Mauritius, Zimbabwe, USA, Tanzania, Uganda, and Swaziland. Organisations presented included members of the academia, inter-governmental organizations including UN agencies and RECs; national and regional think tanks; national and local government representatives; civil society organizations, national and regional media houses. 30 research papers were presented at the conference, while two panels were organised on Industrialization in the SADC Region and civil society perspectives on democratic developmental states in Southern Africa.
Conference Objectives
The main objective of the conference was to explore how Southern African countries can seek to promote the building of democratic developmental states necessary for economic transformation in the region.
Broadly itemised, the objectives were:
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To brainstorm on the concept, processes and modalities of creating democratic developmental states in Southern Africa;
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Undertake comparative analysis and experiences on the efforts at building developmental states in a global context;
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Review existing lessons, good practices, case-studies and success stories that may be beneficial to the Southern African context;
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Explore the opportunities and challenges that Southern African countries may confront in their efforts in constructing democratic developmental states;
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Examine how regional frameworks and protocols can assist Southern African countries to achieve strategic developmentalist objectives;
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Explore how international context (global trade agreements, governance systems, power relations etc.) can affect either positively or otherwise, the capacity of Southern African countries to construct developmental states;
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Provide policy guidance and possibly roadmap on how countries in Southern Africa can achieve economic transformation and sustainable development through the developmental state paradigm.
Account of Proceedings
- The Conference took place in both plenary and breakaway sessions. The broad theme of the conference was broken down into the following sub-themes: (i) discussions around the concepts, theory and comparative experiences in democratic developmental state construction; (ii) the sharing of country experiences on building developmental states; (iii) governance and developmentalist leadership; (iv) macroeconomic policy, planning and strategies; (v) State capacity and institutions; (vi) actors, institutions and agencies; (vii) social policy for accelerated development; and (viii) the role of regional and international institutions and frameworks. Additionally, the Conference held (i) a multi-stakeholder dialogue on industrialization in Southern Africa involving representatives of RECs, governments, civil society, as well as (ii) a civil society roundtable discussion on the role of society in the building of democratic developmental state.
- The keynote address was delivered by Thandika Mkandawire, Professor of African Development at the London School of Economics and Political Science, who spoke about key components of democratic developmental state which includes political capacity for citizens’ mobilization, extractive capacity to generate accumulation, allocative and enforcement capacity as being key to development. He further noted that it is important to unravel what is perceived as advantages of authoritarianism – efficiency, political stability and accumulative capacity, which can also be done in a democracy. Thandika Mkandawire gave an example on the alternative ways of citizens’ mobilization based on the nature of the political regime. While authoritarian governments may use force and coercion to compel obedience and discipline to state policies, democratic ones can use persuasion and involvement to mobilize the people. As such, the so called mobilizational capacity of authoritarian regimes is also a function that democratic regimes can perform in other ways.
- The Conference also provided an avenue in which academics, university students, civil society representatives, representatives of regional economic communities, and private sector representatives presented academic and policy papers around the theme and sub-themes of the Conference. Moreover, OSISA presented the outcomes of her country studies to the Conference, covering Botswana, South Africa, and Malawi.
This was followed by an official launch of ECA’s Economic Report on Africa 2015 with a focus on Industrialisation through Trade.
Observations
The conference made the following observations:
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Visionary and effective leadership is central to a democratic developmental state project, however, the issue of leadership remains highly contested currently, on its quality and capacity, especially in the context of a globalised World, confronted by both domestic and international political economy challenges, in a neo-liberal environment;
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Democratic developmental state construction is a nationalist project, however, since the immediate post-independence era there has been a decline in the nationalist state agenda and coalition necessary for accelerated growth and development;
There is apparent weakness in state-civil society relations in building synergies, complementarity and common development vision in most countries;
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Some Southern African countries do not have the requisite progressive legal frameworks, including well-crafted constitutions to support the development of strong and capable institutions, necessary for promoting democratic developmental state;
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There is limited development coalition and consensus especially amongst the political and business elites on the development agenda and frameworks. This creates discontinuities in policy orientation, pronouncements and implementation by different political regimes;
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The realisation of a Democratic Developmental State requires a commitment to human rights, including gender rights, and the promotion and protection of citizen socio-economic rights;
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Issues of corruption, poor accountability, and lack of respect for procedure erode public confidence in governance and affects the capacity of the state for citizens’ mobilization;
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While notable progress is being made through performance contracts, remuneration system, security of tenure, however, the bureaucracy remains fairly weak and inefficient in many countries affecting its capacity to effectively deliver public goods and services;
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Long-term development vision is critical for facilitating structural transformation, however, challenges exist in many countries in framing long-term visions beyond political regimes and administration that different parts of the state and non-state actors can remain committed to, and implement religiously, overtime;
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The capacity of the private sector remains weak in many countries and so is public-private sector partnerships necessary to scale up the level of economic activities and production in many Southern African countries;
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The vast natural resources of Southern African countries have not been able to spin development for them beyond the collection of revenues and royalties. The exploitation of those natural resources have not expanded jobs, created inter-sectoral linkages, better economic opportunities for the people or value addition necessary for promoting economic transformation in the region;
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The use of information technology to promote economic transformation is not yet optimally utilised in Southern Africa;
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The international economic regime is perceived to constrain Southern Africa’s economic growth potentials and capacity as the logic of globalised free trade reduces opportunities of industrialization for weak countries in the region;
Recommendations
The conference made the following recommendations to address the issues identified above.
On leadership, governance and economy
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There should be concerted efforts to develop visionary, ethical and effective leadership across sectors of society especially political leadership necessary for promoting accelerated economic development and structural transformation in the region;
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The capacity of democratic institutions like the parliament and political parties must be enhanced as key actors in the democratic developmental state project;
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Civil society must redefine its involvement in the economic and political development of countries in the region premised on complementarity and creative engagement with the state, rather than undue opposition to it;
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There is need to promote constitutionalism in which the rule of law, political accountability, citizens’ voice and power are given prominence in governance;
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The policy space necessary for effective economic policy formulation at the national level should be enhanced especially within the context of global neo-liberal regime that tends to limit space for national policy making for development purposes;
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Sound macro-economic policies are indispensable to sustained economic growth and transformation. Hence, the state must engage the people, especially key stakeholders (business, labour, and professional groups etc) in framing macro-economic policies for countries in the region;
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Africa’s national resources should be used to leverage its industrialisation process, the issue of value addition and beneficiation is central to enhancing Africa’s development prospects;
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While foreign direct investment is important for Southern Africa’s economic development, domestic capital and entrepreneurs are equally important. National governments should provide incentives for domestic entrepreneurs in transforming their capacity to support the economic transformation process;
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The financing of Southern Africa’s economic development should explore internal sources including pension funds, remittances from abroad and blocking loopholes of illicit financial flows;
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The APRM process provides an opportunity for cross-learning and the promotion of national consensus on national development; hence it should be enhanced and made to be a process, rather an event. Key recommendations from the national country review process and the national plan of action must be synchronised with national development plans. The capacity and integrity of the APRM national secretariat must also be enhanced to ensure effective management of the APRM process;
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The use of ICT in leapfrogging Africa’s development, particularly GIS capability should be enhanced to support Africa’s economic transformation;
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Land distribution remains a critical challenge even though all states are signatory to inclusive land distribution protocols. There should be concerted efforts to promote the domestication of such protocols;
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National development planning should be cardinal in the macroeconomic process of Southern African countries. The capacity for implementation of such plans needs to be scaled up;
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It is important to design mechanisms by which national development vision and plans find expression and are internalised and implemented at the local level and for local communities to be part of, and claim the development process;
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The informal sector should not be criminalised or vilified but rather encouraged to grow and contribute to the national economy, while the state supports and engages it and facilitates the payment of taxes by the sector.
On social policy for accelerated development and empowerment of economically marginalized groups;
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Countries in the region should consider a form of national youth service to promote nation building and provide further opportunities for young people. This should be undertaken within a democratic framework and not an authoritarian one;
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There is need for Southern African countries to domesticate existing regional and international gender protocols and promote gender equality and protection, including macro-economic framework having gender dimensions;
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Social accountability should be considered a human rights issue and taken seriously by all governments and other stakeholders;
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Social policies should be designed by Southern African countries to ensure social protection, assuage human vulnerabilities and welfare for all in society especially the weak and marginalised groups;
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Quality education at all levels (primary, secondary and tertiary) should be given utmost priority by Southern African countries. Skills based education should be encouraged that increases job opportunities for young people in a competitive capitalist World.
To support a developmentalist State project, regional and international institutions, frameworks and agreements should;
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The signing of the Tripartite Free Trade Agreement (TFTA) in June 2015 is highly welcome and Southern African countries are encouraged to scale up intra-regional trade but premised on the foundation of industrialization;
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Agriculture and regional value chains constitute a key policy at SADC level – this requires improved regional value chains with developmental benefits for all member states;
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The African Peer Review Mechanism by promoting the idea that states can be more democratic and through interrogating issues of governance, can support the improvement of feasible and sustainable policies, which should be enhanced;
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The shift from MDGs to SDGs (Sustainable Development Goals) should be used as an opportunity to promote a transformative agenda in support of the democratic developmental state project.
Way Forward
The way forward was organised into two parts. First, the moderator of the session, Said Adejumobi invited participants to suggest ways and ideas on how they would like to see the project carried forward and their possible roles and that of their organisation in it. Second, the organisers of the conference presented concrete ideas and plan on the way forward for the project.
Suggestions/Recommendations by the Conference Participants:
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The organising partners of conference- ECA-SA, UNDP-SA, OSISA and the Trust should institutionalise and consolidate their partnership in carrying the project forward and engaging other partners institutions on it;
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The organisers consider the publication of the papers presented at the conference;
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Participating stakeholders at the conference like the media, civil society, and RECs committed to the dissemination of the communiqué and full report of the conference through their various platforms and networks;
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To develop forum/medium on-going discussions among participants through web-based discussions (i.e. Twitter and facebook accounts of the conference) with the aim of facilitating on-going dialogues on the subject matter. Key stakeholders that should form part of the dialogue should include; governments, civil society, religious networks, traditional leadership and the private sector.
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The organising partner institutions to work with SADC in organising a “Forum on Developmental Integration in Southern Africa” through which issues can be explored further at the regional level;
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The proposed SADC Economic Summit provides a good opportunity that can be tapped into in further discussion on the developmental state project;
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Policy dialogues should be organised on the subject matter and institutions like MISTRA (Mapungubwe Institute for Strategic Reflection) and Actionaid committed to facilitating policy dialogues on it in conjunction with the Conference organisers.
Way Forward by the Organising Partner Institutions
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Publications: Selected papers presented at the conference will be considered for publication after thorough review and revision processes in books and journals including the newly launched journals by ECA – Journal of African Transformation and Journal of African Development Alternatives (being published with the University of Cape Town);
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Further Research will be explored on specific areas of the theme of the conference and its key recommendations including areas of leadership, ethical governance, industrialization, natural resources management, and developmental regional integration;
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The Communication component of the project will be maintained and scaled up. The dedicated conference website will be kept active for the next one year at least, and made interactive. Also, the communiqué and proceedings of the conference will be posted on the website. Relevant literature and links will also be sourced and shared through the website;
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Policy dialogues will be organised with other partners who have signalled interest in doing so – MISTRA (Mapungubwe Institute for Strategic Reflection) and Actionaid. Possible targets for the policy dialogue will include government officials, political leaders, members of parliament, political parties, the business community, and civil society including labour movements.
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Some of the partners indicated that the project will be fed further into their existing programmes and activities. OSISA will seek to mainstream it in its training programmes such as the Economic Justice Summer School and the Public Policy Course and popularise the ideas through its support to the SADC Peoples Summit and other broad-based fora and UNDP to synchronise it with the work that it is currently doing with the AU on public sector reforms within the context of the African public service charter;
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The organisers to consult with SADC and the AU in exploring how to carry the project further at the regional and continental levels.
Closing Ceremony
The closing ceremony was performed by the organising partner institutions with Bheki Moyo of the Southern Africa Trust, Masego Madzwamuse from OSISA, and Rose Akinyi Okoth from UNDP, Regional Bureau and Said Adejumobi from ECA, Southern Africa giving closing remarks. They all expressed deep satisfaction with the organisation of the conference and its proceedings and thanked the keynote speaker, the moderators and participants of the conference for their engaging and productive deliberations for three days. They all committed to carrying the agenda of the conference forward through the steps outlined above.
Done in Pretoria, South Africa
22nd July 2015
A selection of papers from the Regional Conference on is available below. Download the full set of Conference papers here.
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Kenya industry safeguards place it on a collision path with WTO over free trade
Kenya faces a dilemma over continued protection of its manufacturers amid risk of reprisals from other World Trade Organisation (WTO) members aggrieved by its actions.
The global body has in its latest audit report for July 2015 listed Kenya among countries that are using tariff barriers to shield domestic producers against external competition and warned that such measures could restrict trade and weaken the prospects for full recovery from the global recession.
The survey released on July 23 by WTO Director-General Roberto Azevêdo showed that 104 new trade-restrictive measures (excluding trade remedy measures) were put in place globally in the reporting period October 16, 2014 to May 15, 2015 – an average of around 15 new measures per month.
This monthly rate has remained relatively stable since 2012, though the overall stock of measures nevertheless continues to rise.
Of the 2,416 measures recorded since October 2008, less than 25 per cent have been removed, leaving the stock of restrictive measures still in place at 1,828. This represents an increase of 12 per cent compared to the last report.
“This remains a cause for concern and continued vigilance is required from WTO members,” Mr Azevêdo says.
“The multilateral trading system has proven its usefulness in providing a predictable and transparent framework governing trade between nations and in helping members resist protectionist pressures as a response to the global economic and financial crisis and thereafter,” adds the WTO boss.
“This role in providing a stable, predictable and transparent trading environment should be kept in mind as members prepare for the WTO’s tenth Ministerial Conference in Nairobi in December.”
Protectionism
Kenya has over the past decade found itself flagged in the WTO roll of countries effecting restrictive administrative measures even as the government maintained a series of measures it said would assist protect local manufactures from cheaper imports.
A report by the WTO in 2009 pointed out that between 1996 to 2006, Kenya effected upward tariff adjustments of at least 15 percentage points on 250 products and goods, making it one of the top users of tariffs to protect domestic producers.
The administrative measures escalated following the onset of the global economic crisis with many countries resorting to using formal as well as informal contingency measures to shield their economies from external competition.
“It is no secret that manufactures have had a difficult time in Kenya starting from the time fuel prices hit the roof and the cost of power was unbearable. The state had to come to the aid of manufacturers and protect the little money they were making,” Patel Shah, a plastics dealer in Nairobi said.
Kenya in December 2014, for instance, offered temporary support measures for several goods and items under the duty remission scheme.
Among the beneficiaries were importers of duplex board products for exports of unit and folding boxes, corrugated boxes, flower sleeves, labels, paper and paperboard products, and BOPP film.
Others were importers of textile and textile articles, and staple fibres, glucose and glucose syrup, industrial sugar, wheat grain and completely knocked-down kits for motorcycles.
In his 2015/16 Budget, Treasury secretary Henry Rotich issued an extension on these administrative safety nets, further complicating Kenya’s case before the aggrieved WTO partners.
The minister in his budget handed a lifeline to manufacturers of fish nets, gas cylinders, plastic packaging tubes and food processors – long affected by competition from cheaper imports – when he said the government would implement a deliberate strategy to support local companies by increasing the import cost of non-essential goods.
Manufacturers of paper and paper board products that have been subjected to a stay of application of the Common External Tariff (CET) at the rate of 25 per cent will also have some relief. The tax has over the years made paper and paper board products more expensive for the packing industries and other users.
In order to lower costs, Mr Rotich proposed the withdrawal of the stay of application of the CET and subjected the products to 10 per cent duty.
Skin and raw hide processors also got a reprieve after Treasury moved to harmonise export duty on their products to avoid smuggling.
“In order to deter smuggling, the ministers for Finance have agreed to harmonise the export duty rate on hides and skins at 80 per cent of Free On Board value or $0.52 (Sh50.49) per kilogramme, whichever is higher. The harmonised rate will be implemented during the 2015/16 financial year,” Mr Rotich said.
Motorcycle assemblers also won further extension of a special tax waiver on imported parts, raising hope for growth of the sector. Motorcycles are a popular mode of transport in urban areas in the region for their ability to beat lengthy delays caused by incessant traffic jams.
They are also used heavily in rural areas where they offer more flexibility and wider reach as most areas suffer from poor road networks.
Harrison Mwakyembe, chairman of the EAC Council of ministers said the tax waiver would now be further extended to June 2016.
“In exercise of the powers conferred upon the Council of Ministers by Section 140 of the East African Community Customs Management Act 2004, the Council of Ministers has stayed the application of the conditions contained in Legal Notice No. EAC/39/2013 of June 30, 2013 on duty remission for motor cycle assembly for one year,” he said in a gazette notice.
An earlier tax schedule by the regional tax schedule by the EAC Council of ministers, imported motorcycle parts – commonly known as completely knock down kits – would have attracted a 15 per cent tax starting July 1, 2014.
The implementation of the tax introduced in 2013 was, however, shelved for a year until June 31, 2015 following intense lobbying by manufacturers of motorcycles that have become a popular mode of transport especially in rural areas.
If implemented the unpopular tax move would mean that motorbike manufacturing firms will pay the full 25 per cent tax to import spare parts, which is the equivalent of duty paid for finished motorcycles under the EAC Customs Union protocol.
Only manufacturers who sourced for motorbike parts from any of the EAC member states were allowed to enjoy the 15 per cent tax waiver, according to earlier plans by the ministers.
The regulation applies in all the EAC partner states with each having varied duty remission rates. The duty remissions scheme, introduced eight years ago, allowed export-oriented manufacturers of commodities in the EAC bloc to pay reduced rates for import inputs instead of paying in full the 25 per cent common external tariff rates in line with the customs union protocol.
This is in addition to the requirement that manufacturers of the goods produced using inputs shipped in under the duty remissions scheme are supposed to sell up to 80 per cent of their products outside the EAC.
It means only 20 per cent of the goods manufactured using inputs that have benefited from the duty exemptions can be sold in the entire region.
Although these measures may be deemed beneficial to local manufacturers, a sustained use of tariff barriers may attract reprisal from other countries which felt disadvantaged by them.
“Although the reports have confirmed that the overall trade policy response to the 2008 crisis has been significantly more muted than expected based on previous crises, they have also drawn attention to a number of worrying trends,” Yonov Frederick Agah, deputy director general of the WTO says in a brief.
“For example, while WTO members are showing restraint with respect to the introduction of trade-restrictive measures, the accumulative stock of these continues to rise.”
In the aftermath of the 2008 economic and financial crisis, the WTO was requested to enhance its trade monitoring and surveillance function, so as to provide members with all the information needed to collectively prevent the risk of backsliding into protectionism.
“Today, there is widespread agreement that protectionism is counterproductive. Faced with an economic downturn, the probability of governments resorting to protectionist policies that favour domestic producers always tends to increase,” Agah says.
Pressure
“Politicians, under domestic pressure from trade unions and industry lobbies, may opt for policies that may appear to provide short-term benefits for their constituencies, but in reality end up hurting domestic consumers and damaging competitiveness,” he further says.
Despite the action by Kenya and other countries, the WTO reckons that though such measures should ordinarily aim at protecting domestic producers from dumping, there was no evidence that these countries were victims of such trading practices.
“Of the trade-restrictive measures introduced since 2008, fewer than 25 per cent have been eliminated. Similarly, a large number of behind-the-border measures are creating barriers to trade and are hurting businesses, in particular small and medium-sized enterprises,” Agah says.
In 2013, Kenya was caught in a brief tariff tussle with Zambia that for a moment threatened to escalate into a full trade row.
Zambia temporarily imposed duty on Kenyan exports in retaliation to Nairobi’s refusal to allow hundreds of tonnes of its sugar to enter the country.
About 10 trucks laden with Zambian sugar destined for the Kenyan market were detained at the Namanga border for more than three weeks, prompting Zambia to retaliate.
The Zambian government invoked provisions of the protocol of the Common Market for Eastern and Southern Africa (Comesa), which allows retaliation against unfair trade practices. The two countries are members of Comesa.
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tralac’s Daily News selection: 30 July 2015
The selection: Thursday, 30 July
The Tripartite Free Trade Agreement: results of Phase One of the negotiations (tralac)
An important question to be answered is whether this particular approach (merging existing RECs into inclusive FTAs) is workable and the appropriate route towards continental integration. Is the TFTA indeed a building block for continental integration? Will inter-REC negotiations not generate their own new difficulties? What do the TFTA negotiations and the Agreement adopted in June 2015 tell us? How can new challenges and technical difficulties be dealt with? What role do regional hegemons (such as South Africa) play? What are the lessons and the implications for the Continental FTA , for which the negotiations were officially launched on 15 June 2015? [The author: Gerhard Erasmus]
Seeking trade open data on a specific country or region, such as Sub-Saharan Africa? (World Bank)
UN projects world population to reach 8.5 billion by 2030, driven by growth in developing countries (UN News Centre)
The world’s population is projected to reach 8.5 billion by 2030, 9.7 billion by 2050 and exceed 11 billion in 2100, with India expected to surpass China as the most populous around seven years from now and Nigeria overtaking the United States to become the world’s third largest country around 35 years from now, according to a new UN report. Moreover, the report reveals that during the 2015-2050 period, half of the world’s population growth is expected to be concentrated in nine countries: India, Nigeria, Pakistan, Democratic Republic of the Congo, Ethiopia, Tanzania, the United States, Indonesia and Uganda. By 2100, 10 African countries are projected to have increased by at least a factor of five: Angola, Burundi, Democratic Republic of Congo, Malawi, Mali, Niger, Somalia, Uganda, United Republic of Tanzania and Zambia.
SADC Protocol on Free Movement of People: baseline study, presentations (NANGO)
In Zimbabwe the National Association of Non Governmental Organisations, on behalf of local civil society, is advancing the need for the state to ratify and domesticate all outstanding SADC protocols. In line with this initiative NANGO conducted a baseline assessment of the SADC Protocol Facilitating the Movement of Persons 2005, in order to harness the contextual benefits for Zimbabwe in ratifying this protocol. The study affirms that, the Protocol expresses the determination of member states within SADC to place intra regional movement at the heart of the regional integration process.
South Africa’s visa regime: a collection of links on the on-going debate about their impact
Hanekom vs Gigaba: When a law hurts the country (Daily Maverick)
SA’s new visa rules led to drop in tourism, says minister (Business Day)
New tourism markets in SA 'will simply fall away' (Fin24)
Taiwan in talks with South Africa on changes to visa rules (Focus Taiwan)
China quickens visa applications (Zambia Daily Mail)
Private sector has capacity to implement Northern Corridor projects, says Ford (New Times)
Private sector operators in the ICT sector from Kenya, Uganda, Rwanda and South Sudan recently came together seeking to be included in the ongoing Northern Corridor Integration Projects Initiative. Under the umbrella body Northern Corridor Technology Alliance, the operators are seeking to take lead of earmarked ICT projects without foreign involvement. The New Times’ Collins Mwai spoke to the coordinator of the alliance, Robert Ford, who also serves as the vice-president of the Private Sector Federation ICT chamber. Excerpts:
West African states prepare MOU on nuclear cooperation (World Nuclear News)
The newly created West African Integrated Nuclear Power Group (WAINPG) prepared a draft memorandum of understanding and three-year action plan at its first meeting, held last week in Niamey, Niger. The heads of delegations from Benin, Burkina Faso, Ghana, Mali, Niger, Nigeria and Senegal will take the MOU document to their respective governments for signature, which will commit them to proceeding with the initial planning for a regional nuclear power program. Djibo Takoubakoye Daouda, director of nuclear power at NAEHA, told World Nuclear News yesterday that the MOU will take effect upon the signature of four of the parties.
Zimbabwe: Trade deficit widens to $1,8bn (The Herald)
Zimbabwe’S trade deficit in the six months to June rose to $1,83bn from $1,76bn last year, according to latest data from the Zimbabwe Statistics Agency. Imports amounted to $3,06bn and exports were at $1,23bn. South Africa continues to be the leading trading partner with total trade between the two countries for the month of June being $314,5 million representing 42% of total trade of $747,9 million. Zimbabwe imported goods and services worth $203,3 million from its southern neighbour while the country exports were $111,2 million. Total trade with SADC countries, including South Africa, was $432 million or 57,8%. Zimbabwe’s trade with Zambia is in deficit with the country consuming more of its northern neighbour’s products than it is exporting.
Mozambique: CSO discussions on Systematic Country Diagnostic (World Bank)
The World Bank convened non-state actors in its office in Maputo to jump start discussions aimed at preparing the institution’s Systematic Country Diagnostic, known as SCD from its English acronym. The SCD represents a key knowledge product whose findings inform the preparation of a new WBG operational strategy for Mozambique for the coming years, called Country Partnership Framework. The participants raised a number of interesting discussion points and made important suggestions for the Bank’s consideration, including the following:
SA stuck in low growth trap, Nene warns ANC (Business Day)
Finance Minister Nhlanhla Nene sketched a bleak picture of the country’s economy to the African National Congress (ANC) lekgotla at the weekend and warned of several risks. His forthright presentation listing a range of concerns echoed his message to the ANC’s January lekgotla when he acknowledged that the government was partly responsible for eroding SA’s growth potential. Last weekend’s presentation offered a grimmer picture of the economy than the January one.
Kenya: June diaspora remittances up 17% (Central Bank of Kenya)
Remittance inflows to Kenya picked up in the first half of 2015 by 9.2% to USD 754 million from USD 690 million in the first half of 2014. In June 2015, remittance inflows increased by 17.% to USD 136 million compared to USD 116.1 million in June 2014 and increased by 5.3% when compared to inflows in May 2015. The increase was largely driven by flows from North America.
Uganda: Contractors to be compelled to buy locally made goods (Daily Monitor)
In an attempt to provide market for local manufacturers, State minister for Industry James Shinyabulo-Mutende has said government is moving towards compelling foreign contractors to procure locally made products. Presently, foreign contractors are free to import everything they need despite the fact that some of the products are readily available here. And as a result, Mr Mutende said, the country finds itself struggling with foreign exchange volatility as well as employment questions which could have been dealt with if such resources were retained in the economy.
Rwanda: Increasing support to SMEs will ensure sustainable economic devt (New Times)
In December last year, trade and industry ministry set up an SMEs forum secretariat that brings together different key players from various sectors as one of the ways aimed at solving the challenges that SMEs face. The SMEs Forum secretariat has come up with various means through which issues facing SMEs will be examined and resolved, according to Kanimba. Some of the challenges the SME industry faces include lack of professionalism, innovation and access to current technology, according to the secretariat.
Nihal Pitigala: 'Traditional trade policy is alive and kicking' (World Bank Blogs)
With the growing importance of global value chains as a conduit for trade integration, much of the recent empirical analysis and other literature has focused on the impacts of non-tariff barriers, behind-the-border measures, and other transaction costs. Traditional barriers, tariffs in particular, have generally been dismissed as less disruptive to trade and, therefore, have fallen out of the policy debate. However, evidence is surfacing from developing countries that import taxes are on the rise, increasing protection, and their disruptive tendencies are often disguised. Along with the rising tendency to subsidize domestic industries, these additional taxes tend to further augment the inherent anti-export bias, which can be particularly detrimental to trade-led development strategies and policies in developing countries.
UN lays down 9 principles in tackling sovereign debt (UNCTAD)
In what was hailed as a historic breakthrough in international law, a United Nations (UN) committee has unanimously adopted nine principles upon which new regulatory mechanisms could be built to tackle sovereign debt crises. UNCTAD, as the focal point for debt issues in the UN, has long advocated for international rules and mechanisms to better manage sovereign debt problems along the lines commonly found at the national level. UNCTAD was entrusted by the UN General Assembly with the task of sharing its expertise with the committee. The principles will form a resolution to be put to the vote at the United Nations General Assembly at its upcoming session and it is expected to pass.
Bank and investor risk policies for soft commodities (UNEP)
A new lending and investment policy tool for financial institutions aims to reduce the deforestation risk caused by the unsustainable production, trade, processing and retail of soft commodities, especially soy, palm oil and beef. The study, entitled "Bank and Investor Risk Policies for Soft Commodities" highlights policies that banks and investors can adopt to help reduce deforestation and forest degradation risks resulting from unsustainable practices across agricultural supply chains that are major drivers of tropical deforestation.
Economic ‘slowdown’ predicted for Latin America and Caribbean in 2015 (UN News Centre)
Panama will lead Latin America and the Caribbean countries in economic growth that will average 0.5%in 2015, according to United Nations projections which note that to reverse the region’s economic slowdown, more investments are needed to boost growth and improve productivity. Launching the Economic Survey of Latin America and the Caribbean 2015 in Santiago, the UN Economic Commission for the region forecasts that South America will contract -0.4%, Central America and Mexico will grow 2.8%, and the Caribbean will expand just 1.7%.
Filling the gap: infrastructure investment in Brazil (IMF)
This paper assesses the state of Brazil’s infrastructure, in light of past investment trends and various quality and quantity indicators. Brazil’s infrastructure stock and its quality rank low in relation to that of comparator countries, chosen amongst main export competitors. We provide evidence that infrastructure affects domestic integration by analyzing price convergence of tradable goods across major cities. The government’s concession program will narrow part of the infrastructure gap, however, governance reforms will be crucial to improving investment efficiency.
Nigeria spends $2.4bn on rice importation in 3 years – Emefiele (Premium Times)
Brazil's agriculture minister optimistic about a Mercosur/EU trade accord by end of the year (MercoPress)
Blaming rivals and low tourism numbers, Kenya Airways posts record $252m loss - that's nearly $700,000 every day (M&G Africa)
Actions for inclusion amid rising inequality (Devex)
The gender gap in extractive dependent countries (UNDP)
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Actions for inclusion amid rising inequality
Concerns over inclusion feature in 10 of the 17 sustainable development goals that are set to replace the Millennium Development Goals, which expire this year. Such a focus on inclusion is vital for Asia and the Pacific where inequality has risen some 20 percent in the past two decades, and around 1.4 billion people live under $2 a day.
All can agree on the societal merits of lessening inequality. Beyond that, rising inequality can also stifle growth and minimize the impact of growth on poverty reduction. Simply put, the greater the ability of lower-income groups to gain education, remain healthy, and accumulate human and financial capital, the greater are their economic contribution and the possibilities for broad-based and more lasting growth.
Economic globalization may have raised the relative returns to capital and given a premium to skill differentials, accentuating inequalities. Technological change can sometimes create winner-take-all contests for incomes. The return to capital relative to labor in manufacturing output is estimated to have risen between the mid-1990s and the mid-2000s in China and India. An individual country, however, may have little control over the effects of globalization.
On more actionable aspects, inequality in incomes has had roots in disparities in education, health and other components of human capital, and unequal opportunities more generally. Government spending on education and health as a share of gross domestic product in Asia has generally been lower than in comparable regions. Furthermore, weaknesses in the workings of the labor markets and policies that favor capital over labor are proximate factors too.
But efforts that seek to reduce inequalities do not automatically have payoffs. History is replete with examples of redistribution efforts – from credit subsides to labor market restrictions – that were highly inefficient and did more harm than good. The crucial question is what policy responses promise to lower income inequality without hurting economic efficiency. Three directions, in particular, look promising.
First, a key area for action is reducing disparities in human capital, but in ways that do not hurt macroeconomic stability. Higher investments in education and health can provide growth enhancing returns, when the emphasis is not just on quantity and access but also on quality and productivity.
Education spending is particularly important both to increase access to schooling and to improve learning outcomes, which is what matters in the labor markets. Livelihood and skills training too is not just about access; it must be relevant and calibrated to the needs of local markets and local employment situations. Furthermore, the increasing role of technology advancement in raising productivity and automation of processes requires an increase in the level of skills set of the population.
South Korea provides experiences in raising the quantity and quality of education through spending both in the public and private sectors. The fast pace of expansion of secondary education (enrollment rate of 97 percent) and then tertiary education (enrollment rate of 98 percent) as well as a high premium on research and development enabled South Korea to have high human capital to support its transition from middle to high-income status, helping to avoid the so-called middle-income trap. South Korea allocates some 7.6 percent of its GDP to education (2010) compared with a 6.3 percent average for the Organization for Economic Cooperation and Development.
Second, social protection and social safety nets can aid investments in human capital development of the poor. They also provide coping mechanisms against adverse shocks such as periodic food price rises or recurring natural disasters. In Brazil, Mexico or the Philippines, conditional cash transfer schemes have provided annual grants to poor families who meet conditions linked to education and health.
Conditional cash transfer programs in these countries have gained considerable ground in reaching a large number of poor and providing socio-economic benefits. Evaluations find that the Philippine program has produced strong socio-economic results that include increasing enrollment rates among children 3-11 years of age, encouraging poor women to use maternal and child health services, and promising improvement in the employability of the poor.
Third, labor market reforms can support job creation for the lower-income strata. These include job matching and information systems, and policies that support labor mobility and flexibility. Thailand’s Tonkla Archeep addressed joblessness due to the global economic downturn that started in 2008. This program combined a skills development and training program with that of unemployment insurance. The program extended financial support to several companies to postpone layoffs.
Related is information and technology, facilitating better functioning of markets. Improving access to information, especially for micro, small and medium entrepreneurs, can help make often fragile businesses less vulnerable. A case in point is small farmers in India benefiting from access to free, real-time pricing and other key agriculture information from village Internet kiosks to improve the supply chain for its agribusiness exports (for example, the so-called e-Choupal program).
These three aspects – human capital, social protection and labor markets – are far from comprehensive, and there is no “one size fits all” for greater inclusion. But as inclusion assumes a big part of the SDGs, learning from the experience of programs for greater inclusion assumes urgency.
Sustaining Development is a three-month online series exploring the post-2015 development agenda hosted by Devex in partnership with Chevron, FXB, Global Health Fellows Program II, Philips, Pfizer, UNIDO, U.N. Volunteers and the U.S. Council for International Business. We will look at the practical steps needed to move the sustainable development goals from concept to reality. Visit the campaign site and join the conversation using #SustainDev.
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United Nations lays down clear principles in tackling sovereign debt
United Nations responds to sovereign debt crises by adopting principles, with UNCTAD support, that could underlie a new legal framework and regulatory mechanisms.
In what was hailed as a historic breakthrough in international law, a United Nations (UN) committee has unanimously adopted nine principles upon which new regulatory mechanisms could be built to tackle sovereign debt crises.
UNCTAD, as the focal point for debt issues in the UN, has long advocated for international rules and mechanisms to better manage sovereign debt problems along the lines commonly found at the national level. UNCTAD was entrusted by the UN General Assembly with the task of sharing its expertise with the committee.
The principles will form a resolution to be put to the vote at the United Nations General Assembly at its upcoming session and it is expected to pass, Sacha Llorenti, committee chair and Permanent Representative of the Plurinational State of Bolivia to the UN, told a press conference at the UN in New York on 28 July.
Mr. Llorenti said the move on the part of the General Assembly to tackle sovereign debt crises, such as those that have hit Argentina, Greece, Ukraine and Puerto Rico, was “unprecedented” and “historic”.
Carlos Alberto Bianco, Secretary of International Economic Relations at Argentina’s foreign ministry, said that he envisaged the principles as the basis for regulation of “vulture funds” with which his country is still in conflict.
Richard Kozul-Wright, UNCTAD’s Director of the Division on Globalization and Development Strategies, said that by adopting principles such as sovereign immunity and equitable treatment, the UN was the taking the first step toward plugging a “major gap in the international system”.
“UNCTAD, ever since the Latin American debt crisis of the early 1980s, has been advocating very strongly for an equivalent at the international level [to national bankruptcy rules] … and for clear, consistent and fair rules that allow countries that find themselves with problems of excessive debt to work through that problem in a way that does not excessively damage their people and prospects for future growth,” Mr. Kozul-Wright said.
“What has been achieved … marks a very important first stage in moving towards a more rational way of handling sovereign debt crises, from the very fragmented, unfair system that we have,” he added.
Denis G. Antoine, Permanent Representative Of Grenada, speaking on behalf of the President of the General Assembly, said: “The adoption of the report of the Ad Hoc Committee today at the conclusion of its work, for submission to the General Assembly, including the Chairs’ summary and its principles on sovereign debt restructuring, reaffirms the central role of the United Nations General Assembly in contributing to the review of the international financial and economic architecture. I convey my appreciation to the Secretariat, particularly UNCTAD, for supporting the Ad hoc Committee in its work.”
Principles on Sovereign Debt Restructuring Processes
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A Sovereign State has the right, in the exercise of its discretion, to design its macroeconomic policy, including restructuring its sovereign debt, which should not be frustrated or impeded by any abusive measures. Restructuring should be done as the last resort and preserving at the outset creditors’ rights.
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Good faith by both the sovereign debtor and all its creditors would entail their engagement in constructive sovereign debt restructuring workout negotiations and other stages of the process with the aim of a prompt and durable reestablishment of debt sustainability and debt servicing, as well as achieving the support of a critical mass of creditors through a constructive dialogue regarding the restructuring terms.
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Transparency should be promoted in order to enhance the accountability of the actors concerned, which can be achieved through the timely sharing of both data and processes related to sovereign debt workouts.
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Impartiality requires that all institutions and actors involved in sovereign debt restructuring workouts, including at the regional level, in accordance with their respective mandates, enjoy independence and refrain from exercising any undue influence over the process and other stakeholders or engaging in actions that would give rise to conflicts of interest or corruption or both.
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Equitable treatment imposes on States the duty to refrain from arbitrarily discriminating among creditors, unless a different treatment is justified under the law, is reasonable, and is correlated to the characteristics of the credit, guaranteeing inter-creditor equality, discussed among all creditors. Creditors have the right to receive the same proportionate treatment in accordance with their credit and its characteristics. No creditors or creditor groups should be excluded ex ante from the sovereign debt restructuring process.
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Sovereign immunity from jurisdiction and execution regarding sovereign debt restructurings is a right of States before foreign domestic courts and exceptions should be restrictively interpreted.
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Legitimacy entails that the establishment of institutions and the operations related to sovereign debt restructuring workouts respect requirements of inclusiveness and the rule of law, at all levels. The terms and conditions of the original contracts should remain valid until such time as they are modified by a restructuring agreement.
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Sustainability implies that sovereign debt restructuring workouts are completed in a timely and efficient manner and lead to a stable debt situation in the debtor State, preserving at the outset creditors’ rights while promoting sustained and inclusive economic growth and sustainable development, minimizing economic and social costs, warranting the stability of the international financial system and respecting human rights.
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Majority restructuring implies that sovereign debt restructuring agreements that are approved by a qualified majority of the creditors of a State are not to be affected, jeopardized or otherwise impeded by other States or a non-representative minority of creditors, who must respect the decisions adopted by the majority of the creditors. States should be encouraged to include collective action clauses in their sovereign debt to be issued.
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The gender gap in extractive dependent countries
Can we use the revenues generated from oil, gas and minerals to reduce the gender gap in countries with abundant natural resources?
We found a statistically significant negative correlation between our Extractives Dependence Index (EDI) that ranks countries on their dependence on the extractive sector (where 0 equals no dependence and 100 equals highest dependence) and the Global Gender Gap Index (where 1 equals equality and 0 equals inequality). The Global Gender Gap Index for countries with the highest dependence on the extractive sector is 0.60 while it is 0.70 for the lowest dependent countries.
We further examined the difference between women and men in leadership positions and employment. In countries with high dependence on extractives, women make up 8.7% of ministerial level positions; they take up 9.5% of seats in national parliaments and hold 18.4% of senior and managerial positions. In countries with low dependence on extractives, the numbers are almost twice as high at 16.9%, 17.9% and 32.7%, respectively.
In high extractive dependent countries, the average unemployment rate for women is 15% and 8% for men. In the low extractive dependent countries, there is parity in a bad outcome; the unemployment rates are 8% for women and 7% for men. Similarly, in high extractive dependent countries, the ratio between unemployed female to male with tertiary education is 4 to 1. In low extractive dependent countries the ratio is 1.3 to 1.
Women also populate the low productive sectors, making up 21% of the employment in the non-agricultural sectors in the highly extractive dependent countries. The figure is 38% in the low extractive dependent countries. Women account for about 35% of the professional and technical work force in highly extractive dependent countries and 52% in low extractive dependent countries.
The gender disparity results from the extractive sector being susceptible to high capital intensity, male domination, rent seeking and declining share of manufacturing in national income.
So what are the policy implications for tackling such inequalities? One way is to allocate the revenues generated from royalties, corporate taxes and various fees to specific social and economic sectors.
For instance, Mongolia’s Human Development Fund, financed by the country’s mining royalties and dividends, has been earmarked for social protection schemes. Comparably, Nigeria’s recent National Health Bill earmarks 2% of the country’s oil revenues to primary health care.
It is time to shift policy attention towards a gender sensitive fiscal expenditure in resource dependent economies. This means investing the revenues from oil, gas and minerals in women and girls so that they enjoy equal access to leadership positions and employment in fields where they are traditionally underrepresented.
Degol Hailu is a Senior Advisor and Chinpihoi Kipgen is a Research Associate at the United Nations Development Programme (UNDP)
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Addressing development challenges in Southern Africa: An Investment Policy Framework for the Southern African Development Community
The Southern African Development Community (SADC) partnered with the OECD in 2013 to create an Investment Policy Framework (IPF) specific to the SADC region. This framework is a key input to the SADC Regional Action Plan on Investment, and it builds on national-level analytical assessments, peer-learning, and best practices from OECD and non-OECD countries.
The Sixth Focus Group Meeting on the SADC Regional Investment Policy Framework took place from 21-22 July 2015 in Johannesburg, South Africa. This meeting set the implementation priorities for the SADC Investment Policy Framework during 2015/16 and endorsed the IPF for SADC.
The objectives of the 6th Focus Meeting were:
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To discuss revisions made to the SADC Investment Policy Framework (IPF) based on comments received from Member States; to identify priorities for implementation, based on national consultations and the priority voting process of the IPF.
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To discuss the development of a monitoring framework for the SADC IPF, assessing the possibility and desirability of applying monitoring and measuring tools to key components of the IPF. As a basis for these discussions, an issues paper will be presented taking stock of existing methodologies and experiences, with a view to getting guidance from Member States on the types of monitoring approaches that could best support the implementation of investment policy reforms in SADC.
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To discuss future activities to support implementation efforts, including peer learning and sharing of international good practices around key policy reform areas represented in the IPF.
This work is taking place within the context of the NEPAD-OECD Africa Investment Initiative, and also draws on the OECD Tax and Development Programme.
This meeting followed on from 5 previous focus meetings held throughout 2013-2015 during which SADC member states and the OECD developed and honed the SADC Investment Policy Framework.
Timeline for developing the framework
Nov 2013 |
1st focus meeting – Pretoria Introduction of policy pillars and member states were called on to volunteer in topic-specific expert groups. Follow up: Diagnostic questionnaires for each policy pillar prepared by the OECD and shared with member states. |
March 2014
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2nd focus meeting – Johannesburg Discussions focused on countries' key concerns and the technical elements required to guide responses to the questionnaires. |
July 2014 |
3rd focus meeting – Pretoria Presentation of draft analytical reports for the policy pillars on tax incentives, and infrastructure investment. The Global Taskforce updating the PFI attended this workshop, enabling peer-learning from other regions. |
Oct 2014
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4th focus meeting – Pretoria Presentation of draft analytic reports for policy pillars on FDI restrictions, and investor protection. SADC integration into global value chains, and implementation priorities for the framework were also discussed. |
March 2015
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5th focus meeting – Johannesburg Presentation and discussion of draft regional guidelines with member states; identification of options and priorities for peer exchange and monitoring activities. Download agenda |
July 2015
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6th focus meeting – Johannesburg Finalisation of the framework and regional guidelines with member states and launch of implementation phase of the project. Download agenda |
2015 & 2016 | Peer exchange, monitoring and implementation of the framework and regional guidance. |
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Increasing support to SMEs will ensure sustainable economic devt
For any economy that wants to achieve sustainable growth, policy formulation must put support to Small-and-Medium Enterprises (SMEs) as a central component of any sector strategy.
That is the reason why the Ministry of Trade and Industry has, among others, given priority to the SME industry because it is key for the continued growth of the private sector. The ministry has, for instance, created different measures to support SMEs and take them to the next levl so that they are able to create more jobs for the youth.
Francois Kanimba, the Minister for Trade and Industry, says that the government supports SMEs as one of the direct channels through which the unemployment problem can be tackled effectively. “Figures indicate that 98 per cent of those in the private sector are SMEs. It is therefore important that government comes up with mechanisms to solve challenges the sector faces if they are to operate profitably and contribute towards the country’s development agenda,” said Kanimba during a recent exhibition by SMEs in Kigali.
“One of the major challenges we are addressing is not, only to train the young generation about starting their own jobs, but also giving them the required skills and knowledge to be able to operate their business ventures profitably and sustainably,” said the minister.
In December last year, trade and industry ministry set up an SMEs forum secretariat that brings together different key players from various sectors as one of the ways aimed at solving the challenges that SMEs face.
The SMEs Forum secretariat has come up with various means through which issues facing SMEs will be examined and resolved, according to Kanimba.
Some of the challenges the SME industry faces include lack of professionalism, innovation and access to current technology, according to the secretariat.
The government has already assured sector players that the Workforce Development Authority (WDA) and the trade and industry ministry, in collaboration with the Ministry of Education, will help in addressing these problems. These bodies will help build the capacities of different sector players to ensure they operate profitably.
WDA and the National Industrial Research and Development Agency (NIRDA) have also been fronted to address the issue of limited access to technical and business skills.
This will be handled through the Community Processing Centres (CPCs) supervised by by NIRDA. Lack of marketing strategy is another challenge that hinders growth and development of SMEs, according to the forum.
However, Business Professionals Network (BPN), a Swiss non-profit institution, is collaborating with trade and industry ministry, the Rwanda Development Board and the Private Sector Federation and works with external consultants, especially in the area of SMEs, to find remedy to the issue.
Since it started operating in Rwanda in 2011, BPN has trained 170 people and given them loans. Its approach has created a paradigm shift in the thinking of SMEs since they promote prudent business practices. This way, it is expected that more jobs will be created to ease the unemployment problem facing graduates and other youth.
In response to a growing need for risk capital and quality management advice in Rwanda, Business Partners International and other influential global SME investors.
According to Eric Rutabana, the BPI country manager, the institution has approved funding for 30 businesses. The firm focuses on financing sectors that have an impact on the economy.
“We look at projects that generate employment or those that are export-oriented so that the country can cut on its import bill. We also fund enterprises that promote sustainable development through environmentally-friendly practices and production means,” Rutabana explained recently.
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tralac’s Daily News selection: 29 July 2015
The selection: Wednesday, 29 July
Remarks by President Obama to the People of Africa (AU)
Many of your nations have made important reforms to attract investment – it’s been a spark for growth. But in many places across Africa, it’s still too hard to start a venture and to build a business. Governments that take additional reforms to make doing business easier will have an eager partner in America. That includes reforms to help Africa trade more with itself, because the biggest markets for your goods are often right next door. Our work to help Africa modernize customs and border crossings started with the East African Community.
Now we’re expanding our efforts across the continent, because it shouldn’t be harder for African countries to trade with each other than it is for you to trade with Europe and America. Most US trade with the region is with just three countries – South Africa, Nigeria and Angola – and much of that is energy. I want Africans and Americans doing more business together in more sectors in more countries. So we’re increasing trade missions to places like Tanzania, Ethiopia and Mozambique. We’re working to help more Africans get their goods to market. Next year, we’ll host another US-Africa Business Forum to mobilize billions of dollars in new trade and investment – so we’re buying more of each other’s products and all growing together.
The next steps: a post-AGOA passage discussion (Manchester Trade)
Pointedly, the Obama Administration has already pointed out to African diplomatic missions that because it is negotiating mega trade agreements, there's a threat to the current competitive advantage provided to AGOA beneficiaries. The logic for the potential damage from the mega trade agreements is quite simple: if and when one concludes and then begins to implement, the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership mega trade arrangements between the United States and Pacific nations, and the European Union respectively will allow very competitive economies such as Vietnam to do more business with the U.S. under the same privileges AGOA beneficiaries currently receive.
While the mechanism may be different, many Vietnamese garment exports to the United States will receive similar benefits like those in AGOA's third country fabric provision. This will, without a doubt, displace some African exports given that Vietnam is a much more competitive apparel producer than any of the African countries. Fortunately, there's a whole host of vehicles outside of AGOA - legislative or regulatory – that can be used to enhance African opportunities and thus help offset some of the competitive disadvantage that these mega trade agreements could unleash.
To boost trade with Africa, US should focus on governance (World Politics Review)
USTDA commits to support increased trade & investment with Africa, DBSA, IDC
The option of a Framework Agreement in the Continental Free Trade Area negotiations (ATPC)
A framework agreement in international relations is an interim pact between countries that establishes the principles, scope and details of what has been agreed. A framework agreement normally includes a clear understanding that the outstanding issues will be concluded in an incremental manner and/or by a clearly established date. In the context of a trade agreement, a framework agreement may encompass ‘an early harvest’ in one or more areas under negotiation, modalities in other areas, a road map with bench marks and time lines to complete the agreement or provisions for the agreement to be completed in an incremental manner taking variable geometry principles into account. A major advantage of a framework agreement is that it enables the negotiating parties to reach an agreement in key areas within a relatively short period of time with a clear mapping of what remains to be accomplished, how and when. The ASEAN Free Trade Area Agreement which is an agreement in goods only with framework agreements in such areas as services and investment provides a good example of framework agreements as an interim outcome of trade negotiations. The ASEAN framework agreements also provide for the application of variable geometry. [The authors: David Luke, Simon Mevel] [Download]
Africa’s new trade zone needs insurance backing (Business Report)
SA digs in on African business visas (Business Day)
The Department of Home Affairs, which is leading SA’s negotiations on the movement of business people within a future African tripartite free trade area, is strongly resisting a bid by the East African Community (EAC) for business visas to be issued on arrival. Instead, home affairs had proposed extending the special BRICS visa to the 26 states which would be included in the tripartite agreement.
Improving food security in West Africa: removing obstacles to regional trade markets (World Bank)
A new commitment to regional trade in the region is needed to accelerate agricultural production, boost growth and ensure adequate food for more people, according to a new World Bank report. The report, Connecting Food Staples and Input Markets in West Africa: A Regional Trade Agenda for ECOWAS Countries, calls on governments in West Africa to move beyond nationally-focused food policies and address regional trade within ECOWAS. The report builds on the lessons of the World Bank report, “Africa Can Help Feed Africa,” and examines the specific circumstances in West Africa, home to one-third of the continent’s population, and bringing new analysis to the food staples trade and policies in the region. [Download]
Five countries revise lessons in agro statistics (UNECA)
Eastern Africa consultation: Common African Position on the World Humanitarian Summit (African Union)
The purpose of the AU consultative process is to stimulate a discussion among Regional Economic Communities and Member States on the emerging issues within the global and regional humanitarian landscape, in so doing undertake a “Political Process” for reform to strengthen the humanitarian system. The outcomes of regional consultations will be consolidated into an African Common Africa Position to be presented in the World Humanitarian Summit in Istanbul, Turkey 2016. Africa’s narrative in shaping a new humanitarian agenda in a globalized and rapidly changing humanitarian landscape will be grounded in AU’s vision to address root causes and progressively eliminate forced displacement on the continent.
Blue Okavango prepares SADC for regional cooperation, humanitarian assistance, disaster relief (Daily News)
Mozambique: More than 135000 people face food insecurity
Investment Policy Framework for the Southern African Development Community (OECD)
The objectives of the meeting, 21-22 July, were to agree on priorities for implementation based on SADC member states' needs; discuss how to monitor the implementation of the IPF; strengthen capacity, foster dialogue, and encourage policy reform on priority areas; and to assist member states in setting strategic direction to support the implementation of the IPF. This meeting followed on from 5 previous focus meetings held throughout 2013-2015 during which SADC member states and the OECD developed and honed the SADC Investment Policy Framework. [Addressing development challenges in Southern Africa: an investment policy framework for SADC]
The Promotion and Protection of Investment Bill protects investors: Minister Davies (the dti)
The Promotion and Protection of Investment Bill has been tabled in Parliament on following an extensive public consultation process. The Minister of Trade and Industry, Dr Rob Davies says the Bill seeks to promote investments and clarify the level of protection that an investor may expect in South Africa and ensure that the country remains open to foreign investment. “The Bill also aims to confirm Government’s right to pursue constitutionally-driven national development objectives and recognises the right of governments to regulate in the public interest. In addition, it promotes a balance between the rights and obligations of investors, ensures the equal treatment between foreign investors and domestic investors. It also provides clarity for the standards of protection applied to investment,” says Davies.
Zimra misses H1 revenue target (The Herald)
Zimra’s net revenue collections for the first half of the year fell 6% to $1,66bn against a target of $1,76bn. On a comparative basis the net collections were 3% lower than the $1,72bn collected during the same period last year. Zimra board chairperson Mrs Willia Bonyongwe attributed the failure by Zimra to meet the revenue target to a myriad of challenges which affected economic performance. These, she said, included liquidity constraints, limited lines of credit from financial institutions, power shortages, retrenchments and company closures. “The shrinking of the formal economy has led to the growth of the informal sector whose contribution to revenue is not significant."
Tanzania becomes east, central and southern Africa fibre optic information hub (IPPmedia)
Tanzania Telecommunication Company Limited (TTCL) plans to make its fiber optic cable to be the information hub in east, central as well as southern Africa. In an exclusive interview with ‘The Guardian’ at the week end, the TTCL acting Chief Executive Officer, Peter Ngota said that it was one of the company’s long-term plans. He said, currently, nearly all neighbouring countries depend on the TTCL fibre connectivity as a source of information. These are Burundi, Rwanda, Zambia, Malawi, Kenya and Uganda. Ngota said further that under the plans, TTCL has will ensure that all countries in east, central and southern Africa—particularly SADC use the TTCL fibre optic cable as the hub of information.
Advanced technology increasingly shaping Africa’s financial sector
The future shape of financial services in Africa 2015 report by PwC describes the sector as a marketplace without boundaries. It explains that compared to global markets – where the outlook for financial services is more solid – the risk of disruption in traditional African financial services market has triggered the need for entities to reassess their strategies. An Accenture report titled African financial services come of age, suggests a promising future for the region’s banking sector. It reveals that the development of consumer payment networks took years to become fully functional in mature economies, while many countries in Africa are now beginning to expand their traditional payments infrastructure to adapt to new international standards.
Does a Regional Trade Agreement lessen or exacerbate growth volatility? (IMF)
Now or Later? The political economy of public investment in democracies (IMF)
Countries should take action to reduce external imbalances: ESR is posted (IMF)
One in three payments between China and South Africa settled in yuan (South China Morning Post)
ITUC-Africa Human and Trade Union Rights Network: statement on illicit financial flows (Common African Position)
WTO: Declaration on the expansion of trade in information technology products
Azevêdo urges WTO members to hit the ground running in September (WTO)
SA, Botswana and Namibia discuss groundwater resources
Summary Record of the 18th Meeting of the DAC Network on Development Evaluation (OECD)
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Azevêdo urges WTO members to hit the ground running in September
At a meeting of the WTO’s General Council on 28 July, Director-General Roberto Azevêdo said it remains very unlikely that a clearly defined work programme on the remaining Doha issues could be agreed by the mandated deadline of 31 July. However, he said that this did not in any way mean that members could not reach a successful outcome at the 10th Ministerial Conference in Nairobi this December.
“Whatever the outcome this week, it is vital that members remain committed and focused on substantive outcomes. Come September, members should be ready to hit the ground running on substance not process,” the Director-General said. If members can come to a common understanding of what they wish to achieve, early in the autumn, “we have an excellent chance of delivering meaningful results in Nairobi”.
Speech by DG Azevêdo
Thank you, Mr Chairman.
Since I last reported to the General Council on 5 May, there has been intense activity aimed at preparing the DDA work programme.
Our work has continued on the tracks that I outlined at the beginning of the year, specifically:
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The work of the negotiating groups, supported by the group Chairs. This is the main track – it feeds everything we do – and that is where the work programme has to happen.
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My own consultations with different configurations of the membership on a variety of issues, including meetings in Room W.
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And meetings convened by members themselves – some of which I have been invited to and have participated in.
I have also continued my consultations with ministers and leaders, including:
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In May, at the APEC meeting of Ministers responsible for Trade.
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In June, at the informal ministerial meeting convened on the side-lines of the OECD in Paris and the G7 Summit in Germany.
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And, in July, at the 5th Global Review of Aid for Trade and the UN Financing for Development summit in Addis Ababa.
In addition, there was a meeting of African trade ministers in Nairobi last week, convened by the African Union. I was unable to attend due to my consultations here in Geneva, but I made sure that a WTO delegation did attend the meeting, led by DDG Shark. I was very pleased that this meeting was taking place as it signals again the high level of engagement among African members and I think this is very important. Indeed, I am delighted to welcome Cabinet Secretary Amina Mohamed who joins us again today – and who will I'm sure give us a more detailed update on that meeting in a few moments.
Since the May General Council, I also have convened three Room W meetings – on 1 June, 17 June and 8 July. At these meetings I reported to the membership on all of my consultations and on the progress towards the preparation of the work programme.
On each and every one of these occasions I expressed my concern that despite intense and active engagement, insufficient progress was being made on the substantive points – particularly on the gateway issues. Significant differences remained across many areas.
The reality is that despite willingness to explore different approaches and consider proposals or ideas, many members have still not been willing to move towards convergence. Progress has remained very limited.
This is why at the last Room W meeting on 8 July, I was clear in my assessment that as things stood then, there was very little prospect of delivering the substantive and “clearly defined” work programme by the end of the month.
I was also clear that this was not a question of the time available. Rather, it was about making the tough political decisions to unlock the situation. I urged members to keep working, but also to start considering all possible scenarios, including how to move forward in the absence of a work programme.
At that same meeting, I announced my intention to convene a TNC meeting on the 24th of July, and to provide a full report to this General Council about the situation.
However, after talking to delegations and reflecting further, I decided that in order to allow the maximum possible amount of time to keep working before the deadline expires, we should postpone the TNC until the 31st.
So let me give you my assessment today. I have discussed the situation widely – including with the chairs – and I think that, despite our best efforts so far, my earlier view still remains valid.
As I have stated on several occasions, the process has to remain member-driven. Members should not expect me, or the chairs, to put forward a work programme for members to discuss.
It has to come from you.
I have encouraged members to come forward with new ideas and proposals to help build consensus. And you have done that. I sense a willingness to engage in a conversation that is more creative and open minded than before. This is coming not from one or two members, but from a very, very large spectrum of the membership – the majority in fact.
It is very positive. I particularly welcome the initiatives that we have begun to see in recent days.
But, as things stand, we still don’t have a work programme.
And, even within this more open-minded exercise, there are still clear conceptual differences in expectations. For example, I see some large gaps between what some members want to put on the table and what they want in return. This is true for many, including among the major players.
So there is still a long, long way to go.
We are just three days from our deadline and so, despite recent efforts by some groups, I find it hard to see how things can change sufficiently in the time we have available.
But it is vital that we keep working and keep pushing.
Last week a number of negotiating groups met – specifically the groups on agriculture, NAMA and services. The Negotiating Group on Rules will meet tomorrow to discuss two new submissions. The TRIPS Special Session will also meet on Thursday.
The chairs will fully report on these activities to the membership at the TNC on Friday.
And I am continuing my consultations. I had a meeting with a group of delegations last Friday to discuss market access issues in agriculture, NAMA and services in a horizontal manner.
I will also hold sessions to take up some other agriculture issues – specifically domestic support and export competition – as well as the areas of rules, development and LDC issues.
I have also been invited to attend further consultations held by members.
The chairs and I will report fully on all of these activities at the TNC meeting on Friday.
At the TNC meeting, we will have no alternative but to face the reality of what we will have been able to achieve by then. This will not mean making the final call on what we can achieve in Nairobi, or on the DDA more broadly – it is mainly about the work programme.
In a scenario where there is no work programme by the Friday deadline – and this is not the only scenario, we all may yet be surprised – there will certainly be a sense of disappointment that we would have missed an opportunity to establish a clear roadmap to move forward. But we should not allow this to lead us to inaction. It cannot become an obstacle. We will need to redouble our efforts and work towards achieving substantive outcomes for Nairobi.
Indeed, whatever the outcome this week, it is vital that members remain committed and focused on substantive outcomes. Come September, members should be ready to hit the ground running on substance not process.
While we haven't moved forward yet, through our extensive engagement we have built the vehicle which can take us forward.
If a common understanding materializes early in the 2nd semester, then I think we still have an excellent chance of delivering meaningful outcomes in Nairobi. Whatever the outcome this week, when we return after the summer that must be our number one priority.
As the crow flies, Nairobi is about 6,000 kilometres away from Geneva.
In September we will have to stop talking about how we can make the journey, and take our first step.
Thank you for listening. This concludes my report, Mr Chairman.
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Improving food security in West Africa: Removing obstacles to regional trade markets
A new commitment to regional trade in the region is needed to accelerate agricultural production, boost growth and ensure adequate food for more people, according to a new World Bank report.
The report, Connecting Food Staples and Input Markets in West Africa: A Regional Trade Agenda for ECOWAS Countries, calls on governments in West Africa to move beyond nationally-focused food policies and address regional trade within the Economic Community of West African States (ECOWAS) to link farmers with consumers in the region’s booming urban areas.
“Food staples belong at the heart of the ECOWAS agenda on agriculture,” said Jean-Christophe Maur, World Bank senior economist and lead author of the report. “The importance of cross-border cooperation to secure the food supply, as well as manage common natural resources, regional diseases and security challenges, has been made painfully clear in recent years. Now is the time to act and embrace regional trade for what it is – the opportunity to feed populations, reduce poverty, generate jobs and promote shared prosperity.”
The report builds on the lessons of the World Bank report, “Africa Can Help Feed Africa,” and examines the specific circumstances in West Africa, home to one-third of the continent’s population, and bringing new analysis to the food staples trade and policies in the region.
Africa has tremendous agriculture potential with more than half of the world’s fertile yet unused land. Yet countries on the continent are increasingly dependent on food imports from the rest of the world. West African governments, supported by commodity sales, import significant quantities of staples such as rice, maize, cassava and millet, all which are the main source of calories in the region. The food crisis of 2007-2008, followed by rising international food prices, low production levels and a heavy reliance on food imports, has left West African nations unable to affordably feed their citizens, the report notes.
Regional trade in West Africa is key to food security and agricultural development, and can play an important role if supported by policies and commitments from neighboring countries, according to the report. Trade across borders will create economies of scale in food production, expand opportunities for producers, and sharply reduce the vulnerability of families, especially the poor, to price volatilities, drought and other shocks.
An active regional agenda exists in West Africa, and regional institutions such as ECOWAS have shown initiative with the recent adoption of harmonized trade and quality control rules for seed and fertilizer markets, according to the report. Yet despite commitments to integration, the report finds that many of the 15 ECOWAS member states are pursuing policies to support national self-sufficiency, including import bans on food staples from neighboring countries.
Lacking adequate regional policies trade across borders, food producers in West Africa suffer from poorly managed transport and warehousing, a lack of financing, and fragmented supply chains such as refrigeration for perishables, all which hamper the sale of food staples, according to the report. This fragmentation also presents challenges to smallhold farmers and small traders, effectively keeping them from producing excess crops to sell to the food industry.
Working Together for Growth
With the right policies put in place, the potential for regional trade in West Africa could be considerably superior to what it is today, the report notes. ECOWAS is uniquely placed to facilitate, coordinate and enforce such a transition. The report explores a number of options for both regional and national policy makers.
Regional recommendations include:
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Maintain a long-term vision in food trade, but increase the focus on achievable short- and medium-term measures
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Reinforce variable geometry, or flexible negotiations, in regional initiatives
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Improve transparencies around ECOWAS legal texts and projects
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Develop regional monitoring capacity
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Build capacity in the area of trade-related statistics
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Develop regional policies inclusive of private sector-led value chains in food staples
National recommendations include:
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Work to formalize intraregional trade in food staples by eliminating formal and informal trade barriers
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Identify capacity building needs for the implementation of regional commitments
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Develop private sector-led value chains in the food staples sector
“Obstacles such as import restrictions, high transport costs and a lack of standards and quality policies make it impossible to share resources and food staples among countries in West Africa,” says Ben Shepherd, co-author of the report. “Steps to establish an integrated trade market can help improve food security with excess supply in one part of the region easily being shipped to a community with a high demand in another part.”
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Advanced technology increasingly shaping Africa’s financial sector
The African financial services industry is rapidly evolving as a result of advancing technology which is fueling innovation and growth in the sector. While the sector is mature in most developed countries, it is less saturated in Africa, therefore offering many opportunities for new market entrants to challenge the status quo of how business has traditionally been conducted.
This is according to Sumesh Rahavendra, Vice President of Sales for DHL Express Sub Saharan Africa who adds, “The burgeoning middle class and abundance of SMEs in Africa present great opportunities for financial services companies to provide retail banking services to individuals, as well as trade finance to SMEs. We see SMEs as the engine for growth in Africa and the lack of access to finance can often hinder their development. With one of the fastest growing middle classes in the world, there is a wave of consumerism for all types of goods and services such as FMCG, electronics and pharmaceuticals.”
The future shape of financial services in Africa 2015 report by PwC describes the sector as a marketplace without boundaries. It explains that compared to global markets – where the outlook for financial services is more solid – the risk of disruption in traditional African financial services market has triggered the need for entities to reassess their strategies.
“While most international banks are moving towards e-commerce, in Africa, a number of local banks still share information and conduct business with hard copy documentation,” adds Rahavendra.
An Accenture report titled African financial services come of age, suggests a promising future for the region’s banking sector. It reveals that the development of consumer payment networks took years to become fully functional in mature economies, while many countries in Africa are now beginning to expand their traditional payments infrastructure to adapt to new international standards.
“The local retail banking sector is increasingly making use of new technology such as ‘Mobile Money’ platforms. Consumers have started to move away from physical cards, instead relying on their mobile phones to conduct day-to-day banking transactions.”
“In addition to mobile money solutions, most African countries have made a concerted effort to improve their transactional security by moving from the traditional ‘swipe card’ form of retail banking to chip and pin.”
“From a logistics point of view, while banking sector documents continue to present significant shipment volumes intra-Africa, with the new technologies available, there is an increased need for equipment such as servers, ATMs and supplies to be moved into and around the continent, as banks expand into new countries and rural areas. As technology and requirements change, so do our supply chains, and we work very closely with our customers to ensure that we offer them the best possible solutions.”
“The financial sector fueled DHL’s expansion into Africa in 1978 when global banks needed to get documentation to Africa, and it continues to help shape our service offerings on the continent as the sector matures. As the only logistics company to be present in every country and territory in Africa, we not only have front row seats to witness the impressive growth of the sector, but are fortunate enough to work with some of the largest and emerging financial institutions on the continent and play our part in their growth story,” concludes Rahavendra.
Distributed by APO (African Press Organization) on behalf of Deutsche Post DHL.
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Remarks by President Obama to the People of Africa
African Union Headquarters, Addis Ababa, Ethiopia, 28 July 2015
Good afternoon! Thank you, Madame Chairwoman, for your kind words and your leadership. To Prime Minister Hailemariam and the people of Ethiopia – once again, thank you for your hospitality and for hosting this pan-African institution. Members of the African Union, distinguished guests, ladies and gentlemen – thank you for welcoming me here today. It is an honor to be the first president of the United States to address the African Union.
I am grateful for this opportunity to speak to the representatives of the more than one billion people of the great African continent. We are joined today by citizens and leaders of civil society and faith communities, and I am especially pleased to see so many young people who embody the energy and optimism of today’s Africa. Hello! Thank you all for being here.
I stand before you as a proud American. I also stand before you as the son of an African. Africa and its people have helped shape who I am and how I see the world.
In the villages in Kenya where my father was born, I learned of my ancestors, the life of my grandfather, the dreams of my father and the bonds of family that connect us as Africans and Americans.
As parents, Michelle and I want to make sure that our two daughters know their heritage – European and African, in all its struggle and strength. We’ve stood with them on the shores of West Africa, in those doors of no return, mindful that their ancestors were both slaves and slave owners.
We’ve stood with them in that small cell on Robben Island where Nelson Mandela showed the world that, no matter the nature of his physical confinement, he alone was the master of his fate. In others words, Africa and its people teach us a powerful lesson – we must uphold the inherent dignity of every human being.
Dignity – that basic idea that by virtue of our common humanity, no matter where we come from or who we are or what we look like, we are all born equal, touched by the grace of God. Every person has worth. Every person matters.
Every person deserves to be treated with decency and respect. Throughout much of history, mankind did not see this. Dignity was seen as a virtue reserved to those of rank or privilege, kings and elders. It took a revolution of the spirit, over many centuries, to open our eyes to the dignity of every person. And around the world, generations have struggled to put this idea into practice in laws and institutions.
So too, here in Africa. This is the cradle of humanity, and ancient African kingdoms were home to great libraries and universities.
But the evil of slavery took root, not only abroad, but here on the continent. Colonialism skewed Africa’s economy and robbed people of their capacity to shape their own destiny. Eventually, liberation movements grew. And fifty years ago, in a great burst of self-determination, Africans rejoiced as foreign flags came down and your national flags went up. As South Africa’s Albert Luthuli said at the time, “the basis for peace and brotherhood in Africa is being restored by the resurrection of national sovereignty and independence, of equality and the dignity of man.”
A half century into this independence era, it is long past time to put aside old stereotypes of an Africa forever mired in poverty and conflict. The world must recognize Africa’s extraordinary progress. Today, Africa is one of the fastest-growing regions in the world. Africa’s middle class is projected to grow to more than one billion consumers. With hundreds of millions of mobile phones and surging access to the internet, Africans have the potential to leapfrog old technologies into new prosperity. So Africa is on the move, and a new Africa is emerging.
Propelled by this progress, and in partnership with the world, Africa has achieved historic gains in health. The rate of new HIV/AIDS infections has plummeted. African mothers are more likely to survive childbirth and have healthy babies. Deaths from malaria have been slashed, saving the lives of millions of African children. Millions have been lifted from extreme poverty. Africa has led the world in sending more children to school. Put simply, more and more African men, women and children are living with dignity and hope.
Africa’s progress can also be seen in the institution that brings us together today. When I first came to Sub-Saharan Africa as president, I said that Africa doesn’t need strongmen, it needs strong institutions. One of those institutions can be the African Union. Here, you can come together, with a shared commitment to human dignity and development. Here, your 54 nations pursue a common vision of an “integrated, prosperous and peaceful Africa.”
As Africa changes, I’ve called on the world to change its approach to Africa.
So many Africans have told me – we don’t just want aid, we want trade that fuels our progress. We don’t want patrons, we want partners who help us build our own capacity to grow. We don’t want the indignity of dependence, we want to make our own choices and determine our own future.
As President, I’ve worked to transform America’s relationship with Africa – so that we’re truly listening to our African friends and working together, as equal partners.
And I’m proud of the progress we’ve made. We’ve boosted American exports to this region, part of trade that supports jobs for Africans and Americans. To sustain our momentum – and with the bipartisan support of Members of Congress, twenty of whom are here today – I recently signed the ten year renewal of the African Growth and Opportunity Act.
We’ve launched major initiatives to promote food security, public health and access to electricity, and to prepare the next generation of African leaders and entrepreneurs – investments that will help fuel Africa’s rise for decades to come.
Last year, I welcomed nearly 50 African presidents and prime ministers to Washington so we could begin a new chapter of cooperation. By coming to the African Union today, I’m looking to build on that commitment. I believe Africa’s rise is also important to the entire world. We will not be able to meet the challenges of our time – from ensuring a strong global economy to facing down violent extremism to combating climate change to ending hunger and extreme poverty – without the voices and contributions of one billion Africans.
Still, even with Africa’s impressive progress, we must acknowledge that these gains rest on a fragile foundation. Alongside new wealth, hundreds of millions of Africans still endure extreme poverty. Alongside high – tech hubs of innovation, many Africans are crowded into shantytowns without power or running water – a level of poverty that’s an assault on human dignity.
Moreover, as the youngest and fastestgrowing continent, Africa’s population in the coming decades will double – to some two billion people, and many of them will be young, under 18.
On the one hand, this could bring tremendous opportunities as these young Africans harness new technologies and ignite new growth and reforms. On the other hand, we need only look to the Middle East and North Africa to see that large numbers of young people with no jobs and stifled voices can fuel instability and disorder.
I suggest to you that the most urgent task facing Africa today and for the decades ahead is to create opportunity for this next generation. This will be an enormous undertaking. Africa will need to generate millions more jobs than it is doing now.
And time is of the essence. The choices made today will shape the trajectory of Africa for decades to come. As your partner and friend, allow me to suggest several ways we can meet this challenge together.
Africa’s progress will depend on unleashing economic growth – not just for the few at the top, but for the many, because an essential element of dignity is being able to live a decent life. That begins with a job, and that requires trade and investment.
Many of your nations have made important reforms to attract investment – it’s been a spark for growth. But in many places across Africa, it’s still too hard to start a venture and to build a business. Governments that take additional reforms to make doing business easier will have an eager partner in America.
That includes reforms to help Africa trade more with itself, because the biggest markets for your goods are often right next door. Our work to help Africa modernize customs and border crossings started with the East African Community.
Now we’re expanding our efforts across the continent, because it shouldn’t be harder for African countries to trade with each other than it is for you to trade with Europe and America.
Most U.S. trade with the region is with just three countries – South Africa, Nigeria and Angola – and much of that is energy. I want Africans and Americans doing more business together in more sectors in more countries. So we’re increasing trade missions to places like Tanzania, Ethiopia and Mozambique. We’re working to help more Africans get their goods to market.
Next year, we’ll host another U.S.-Africa Business Forum to mobilize billions of dollars in new trade and investment – so we’re buying more of each other’s products and all growing together.
Of course, the United States isn’t the only country that sees your growth as an opportunity. This is a good thing. When more countries invest responsibly in Africa, it creates more jobs and prosperity for us all. But economic relationships cannot simply be about other countries building infrastructure with foreign labor or extracting Africa’s natural resources.
Real economic partnerships have to be a good deal for Africa – they have to create jobs and capacity for Africans. That’s the kind of partnership America offers.
Nothing will unlock Africa’s economic potential more than ending the cancer of corruption. This is not unique to Africa – corruption exists all over the world, including in the United States. Here in Africa, corruption drains billions of dollars from economies – money that could be used to create jobs and to build hospitals and schools.
And when someone has to pay a bribe just to start a business or go to school or to get an official to do their job – that’s not “the African way” – it undermines the dignity of the people you represent.
Only Africans can end corruption in their countries. As African governments commit to taking action, the United States will work with you to combat illicit finance, promote good governance, transparency and rule of law. And let me add that criminal networks are both fueling corruption and threatening Africa’s precious wildlife – and with it the tourism that many African economies count on.
So America also stands with you in the fight against wildlife trafficking.
Ultimately, the most powerful antidote to the old ways of doing things is this new generation of African youth. History shows that the nations that do the best are the ones that invest in the education of their people. In this information age, jobs can flow to where workers are literate, highly skilled and online. And Africa’s young people are ready to compete. As Africa invests in education, our entrepreneurship programs are helping innovators start new businesses and create jobs right here in Africa.
And the men and women in our Young African Leaders Initiative today will be leaders who can transform businesses, civil society and governments tomorrow.
Africa’s progress will depend on development that truly lifts countries from poverty to prosperity – because like people everywhere, Africans deserve the dignity of a life free from want. A child born in Africa today is just as equal and just as worthy as a child born in Asia or Europe or America. At the recent development conference here in Addis, African leadership helped forge a new global compact for the financing that fuels development.
Under the AU’s leadership, the voice of a united Africa will help shape the world’s next set of development goals, and you’re pursuing a vision of the future you want for Africa.
America’s approach to development – the central focus of our engagement with Africa – is focused on helping you build your own capacity to realize that vision. Instead of just shipping food aid to Africa, we’ve helped more than two million farmers use new techniques to boost their yields, feed more people, and reduce hunger.
With our new alliance of governments and the private sector investing billions of dollars in African agriculture, I believe we can achieve our goal and lift 50 million Africans from poverty.
Instead of just sending aid to build power plants, our Power Africa initiative is mobilizing billions of dollars in investments from governments and businesses to reduce the number of Africans living without electricity. An undertaking of this magnitude will not be quick. It will take many years.
But working together, I believe we can bring electricity to more than 60 million African homes and businesses and connect more Africans to the global economy.
Instead of just telling Africa you’re on your own in dealing with climate change, we’re delivering new tools and financing to more than 40 African nations to help them prepare and adapt. By harnessing the wind and sun, your vast geothermal energy and rivers for hydropower, you can turn this climate threat into economic opportunity.
I urge Africa to join us in rejecting old divides between North and South so we can forge a strong global climate agreement this year. Because sparing some of the world’s poorest people from rising seas, more intense droughts and shortages of water and food is a matter of survival and a matter of human dignity.
Instead of just sending medicine, we’re investing in better treatments and helping Africa better prevent and treat disease.
As the United States continues to provide billion of dollars in the fight against HIV/AIDS, and as your countries take greater ownership of health programs, we’re moving toward an historic accomplishment – the first AIDS – free generation.
And if the world learned anything from Ebola, it’s that the best way to prevent epidemics is to build strong public health systems that stop diseases from spreading in the first place. America is proud to partner with the AU and African countries in this mission.
Today, I can announce that of the $1 billion that the United States is devoting to this work globally, half will support efforts here in Africa.
Africa’s progress will also depend on democracy, because Africans, like people everywhere, deserve the dignity of being in control of their own lives. We all know what the ingredients of real democracy are. They include free and fair elections. Freedom of speech and the press. Freedom of assembly. These rights are universal. They’re written into African constitutions.
The African Charter on Human and Peoples Rights declares that “every individual shall have the right to the respect of the dignity inherent in a human being.” From Sierra Leone, Ghana and Benin… to Botswana, Namibia and South Africa, democracy has taken root. In Nigeria, more than 28 million voters bravely cast their ballots and power transferred as it should – peacefully.
Yet at this very moment, these same freedoms are denied to many Africans. Democracy is not just formal elections.
When journalists are put behind bars for doing their jobs, or activists are threatened as governments crack down on civil society, then you may have democracy in name, but not substance. Nations cannot realize the full promise of independence until they fully protect the rights of their people. This is true even for countries that have made important democratic progress.
As I indicated during my visit to Kenya, the remarkable gains that country has made cannot be jeopardized by restrictions on civil society. Likewise, Ethiopians have much to be proud of, and the elections that took place here occurred without violence.
But as I discussed with Prime Minister Hailemariam, that is only the start of democracy. I believe that Ethiopia cannot unleash the full potential of its people if it jails journalists or restricts legitimate opposition groups from participating in the campaign process. And, to his credit, the Prime Minister acknowledged that more work will need to be done if Ethiopia is to be a full-fledged and sustainable democracy.
The bottom line is that when citizens cannot exercise their rights, the world has a responsibility to speak out, and America will, even if it is sometimes uncomfortable – and even when it’s directed toward our friends.
We do so not because our democracy is perfect – we are not. More than two centuries since our independence, we are still working to perfect our union. Nor are we immune from criticism. When we fall short of our ideals, we strive to do better. You see, when we speak out for our principles, at home and abroad, we stay true to our values and we help lift up the lives of people beyond our borders.
If I can speak frankly, we believe that other nations can do more to speak out as well, including African nations.
Just as other countries championed your break from colonialism, our nations must all raise our voices when universal rights are denied. For if we truly believe that Africans are equal in dignity, then Africans have an equal right to freedoms that are universal – that’s a principle we all have to defend.
Today, Africa’s democratic progress is also at risk from leaders who refuse to step aside when their terms end. I have to be honest with you – I just don’t understand this.
I am in my second term. Under our constitution, I cannot run again. There’s still so much I want to get done to keep America moving forward. But the law is the law and no one is above it, not even presidents. And, frankly, I’m looking forward to life after being President. It will mean more time with my family, new ways to serve, and more visits to Africa.
When a leader tries to change the rules in the middle of the game just to stay in office, it risks instability and strife, as we’ve seen in Burundi. And it’s often just a first step down a perilous path.
But if a leader thinks they’re the only person who can hold their nation together, then that leader has failed to truly build their country. In contrast, Nelson Mandela – like George Washington – forged a lasting legacy by being willing to leave office and transfer power peacefully.
And just as the African Union has condemned coups and illegitimate transfers of power, the AU’s authority and strong voice can also help the people of Africa ensure that their leaders abide by term limits and their constitutions. No one should be president for life.
Africa’s progress will also depend on security and peace – because an essential part of human dignity is being safe and free from fear. In Angola, Mozambique, Liberia and Sierra Leone, we have seen conflicts end and countries work to rebuild. But from Somalia and Nigeria to Mali and Tunisia, terrorists continue to target innocent civilians. Many of these groups claim the banner of religion, but hundreds of millions of African Muslims know that Islam means peace. We must call groups like al Qaeda, ISIL, al-Shabaab and Boko Haram what they are – murderers.
In the face of threats, Africa – and the African Union – has shown leadership. Because of the AU force in Somalia, alShabaab controls less territory and the Somali government is growing stronger. In central Africa, the AU-led mission continues to degrade the Lord’s Resistance Army. In the Lake Chad basin, forces from several nations – with the backing of the AU – are fighting to end Boko Haram’s senseless brutality. And today, we salute all those who serve to protect the innocent, including so many brave African peacekeepers.
As Africa stands against terror and conflict, the United States stands with you. With training and support, we’re helping African forces grow stronger. The United States is supporting the AU’s efforts to strengthen peacekeeping, and we’re working with countries in the region to deal with emerging crises with the African Peacekeeping Rapid Response Partnership.
The world must do more to help as well. This fall at the United Nations, I will host a summit to secure new commitments to strengthen international support for peacekeeping, including here in Africa.
And building on commitments that originated here in the AU, we’ll work to develop a new partnership between the UN and the AU that can provide reliable support for AU peace operations. If African governments and international partners step up with strong support, we can transform how we work together to promote security and peace in Africa.
Our efforts to ensure our shared security must be matched by a commitment to improve governance.
Our fight against terrorist groups, for example, will never be won if we fail to address the grievances that terrorists exploit, if we don’t build trust with all communities, and if we don’t uphold the rule of law. There’s a saying, and it’s true – if we sacrifice liberty in the name of security, we risk losing both.
This same seriousness of purpose is needed to end conflicts. In the Central African Republic, the spirit of dialogue recently shown by ordinary citizens must be matched by leaders committed to inclusive elections and a peaceful transition.
In Mali, the comprehensive peace agreement must be fulfilled. And leaders in Sudan must know that their nation will never truly thrive so long as they wage war against their own people – and the world will not forget about Darfur.
In South Sudan, the joy of independence has descended into the despair of violence. Neither Salva Kiir nor Riek Machar have shown any interest in sparing their people from this suffering or in reaching a political solution. Yesterday, I met with leaders from this region.
We agree that, given the urgency of the situation, Salva Kiir and Riek Machar must reach an agreement by August 17. If they do not, I believe the international community must raise the costs of their intransigence. And the world awaits the report of the AU Commission of Inquiry, because accountability for atrocities must be part of any lasting peace in Africa’s youngest nation.
Finally, Africa’s progress will depend on upholding the human rights of all people – for if each of us is to be treated with dignity, each of must be treated equally. As President, I make it a point to meet with many of our Young African Leaders. One was a young man from Senegal. He said something wonderful about being together with so many of his African brothers and sisters. He said, “here, I have met Africa, the [Africa] I have always believed in. She’s beautiful. She’s young. She’s full of talent and motivation and ambition.” I agree.
Africa is the beautiful, talented daughters who are just as capable as Africa’s sons. As a father, I believe that my two daughters ought to have every chance to pursue their dreams – and the same goes for girls here in Africa. We can’t let old traditions stand in the way.
The march of history shows that we have the capacity to broaden our moral imaginations. We come to see that some traditions keep us grounded, but that, in our modern world, other traditions set us back.
When African girls are subjected to the mutilation of their bodies, or early or forced marriage, that sets us back, and it needs to end. When more than 80 percent of new HIV cases in the hardest hit countries are teenage girls, that’s a tragedy and it sets us back.
So America is beginning a partnership with ten African countries – Kenya, Lesotho, Malawi, Mozambique, South Africa, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe – to keep teenage girls safe and AIDS-free.
And when girls cannot go to school and grow up not knowing how to read or write – that denies the world future women engineers and presidents – that sets us all back.
So as part of America’s support for the education and the health our daughters, my wife Michelle is helping to lead a global campaign, including a new effort in Tanzania and Malawi, with a simple message – let girls learn so they grow up healthy and strong.
Africa is the beautiful, strong women these girls grow to become. The single best indicator of whether a nation will succeed is how it treats its women. When women have health care and education, families are stronger, communities are more prosperous and nations are more successful – just look at all the amazing African women here in this hall today.
If you want to empower more women, America will be your partner. Let’s work together to stop sexual assault and domestic violence. Let’s make clear that we will not tolerate rape as weapon of war – it is a crime and those who commit it must be punished. Let’s lift up the next generation of women leaders who can help fight injustice and forge peace and start new businesses and create jobs – and probably hire some men, too. We’ll all be better off when women have equal futures.
And Africa is the beautiful tapestry of your cultures, ethnicities, races and religions.
Yesterday, I had the privilege to view Lucy, our ancestor – more than 3 million years old. In this tree of humanity, with all our branches and diversity, we all go back to the same root. We are all one family – one tribe.
Yet so much of the suffering in our world stems from our failure to remember that; to not recognize ourselves in each other. For when we begin to see others as somehow less than ourselves – when we succumb to artificial divisions of faith or sect or tribe – then even the most awful abuses may seem justified. And in the end, abusers lose their humanity, too.
As Madiba taught us, “to be free is not merely to cast off one’s chains, but to live in a way that respects and enhances the freedom of others.”
Every one of us is equal. Every one of us has worth. Every one of us matters. When we respect the freedom of others – no matter the color of their skin, how they pray or who they are or who they love – we are all more free. My dignity depends on yours, and yours on mine. Just imagine if everyone had that spirit in their hearts.
Just imagine what the world could look like – the future we could bequeath to all these young people here today.
Yes, in our world, old thinking can be a stubborn thing. But I believe the human heart is stronger. And hearts can change. And then minds open. That’s how change happens. That’s how societies move forward, step by halting step, toward those ideals of justice and equality. That’s how your nations won independence. It’s how African Americans won our civil rights. It’s how South Africans – black and white – tore down apartheid.
And it’s why I can stand before you today as the first African American president of the United States.
Unleashing growth that creates opportunity. Promoting development that lifts people from poverty. Supporting democracy that gives citizens their say. Advancing the security and justice that delivers peace. Respecting the human rights of all people. These are the keys to progress, in Africa and around the world. This is the work we can do together – and I am hopeful.
As I prepare to return home, my thoughts are the same as that young man from Senegal. “Here, I have met Africa, the [Africa] I have always believed in. She’s beautiful. She’s young. She’s full of talent and motivation and ambition.”
To which I would simply add, as you build the Africa you believe in, you will have no better partner and friend than the United States of America. God bless Africa. Thank you.
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The Promotion and Protection of Investment Bill protects investors: Minister Davies
The Promotion and Protection of Investment Bill has been tabled in Parliament on following an extensive public consultation process.
The Minister of Trade and Industry, Dr Rob Davies says the Bill seeks to promote investments and clarify the level of protection that an investor may expect in South Africa and ensure that the country remains open to foreign investment.
“The Bill also aims to confirm Government’s right to pursue constitutionally-driven national development objectives and recognises the right of governments to regulate in the public interest. In addition, it promotes a balance between the rights and obligations of investors, ensures the equal treatment between foreign investors and domestic investors. It also provides clarity for the standards of protection applied to investment,” says Davies.
He added that South Africa offers extensive protection to investment, both domestic and foreign, through the Constitution, and other pieces of legislation that affect investment. Minister Davies stated that the Bill builds on the already robust investor protection by clarifying – and bringing into alignment – standards of protection routinely found in international investment treaties with South Africa’s legal framework.
According to Minister Davies, there is a growing global discussion on the approach to investment regulation.
“In the 2015 World Investment Report (WIR), the United Nations Conference on Trade and Development (UNCTAD) argues that the process of reform of international investment agreements needs to be synchronised at national, bilateral, regional and multilateral levels,” explained Davies.
The 2015 WIR presents various policy options which include the followings:
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Safeguarding the right to regulate in the public interest so that limits on state sovereignty imposed by international investments agreements do not constrain public policy making;
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Reforming investment dispute settlement to address the crisis in legitimacy of the current system;
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Expanding investment promotion and facilitation in international investment agreements;
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Ensuring responsible investment to maximise the positive impact on minimising the negative effects of foreign investment; and
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Enhancing the systemic consistency of the international investment agreement regime to overcome gaps and overlaps, and establish coherent investment relationships.
Minister Davies also highlighted that the draft Promotion and Protection of Investment Bill defines international investment law concepts such as national treatment, protection and security, and the transfer of funds in line with constitutional principles and applicable norms. It further confirms the right to property.
“The provision on ‘national treatment’ ensures non-discrimination between domestic and foreign investors that are in ‘like circumstances’. This further clarifies that government may undertake certain measures for inter alia, purposes of economic transformation and the advancement of certain categories of persons. Foreign investors can further expect a level of security as may be generally provided for to domestic investors under the provision on ‘security of investment’. Investors further have their right to property reaffirmed in terms of section 25 of the Constitution. The Bill in no way interferes with the protection afforded to investors under the existing Bilateral Investment Treaties,” indicated Minister Davies.
Furthermore, the Bill outlines the policy perspectives and objectives through core substantive provisions that express South Africa’s commitment to maintaining an open and transparent environment for foreign investors, while recognising the importance of ensuring sufficient scope for the government to regulate all investments, whether domestic or foreign, in order to fulfil legitimate national policy objectives.
Minister Davies emphasised that the rights of investors are entrenched in the Bill.
“With regards to the ‘dispute resolution’, any government action that affects the rights of investors can be raised with the dti or any competent authority playing a facilitatory role in the resolution of the matter. All investors will be able to submit disputes before national courts or relevant authorities, and subject to the exhaustion of domestic remedies, the Government may consent to international arbitration in respect of investments covered by this Act, once promulgated,” stated Minister Davies.
The Parliamentary Committee will conduct a public process during which interested stakeholders may submit comments on the Promotion and Protection of Investment Bill.
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SA, Botswana and Namibia discuss groundwater resources
South Africa, Namibia and Botswana are on Tuesday meeting to discuss the importance of shared groundwater resources and the best approaches to equally share them.
This is the first time Southern African region countries will engage in such a dialogue, said the Department of Water and Sanitation.
“The Ramotswa and Stampriet aquifers are the key resources involving South Arica, Botswana and Namibia that will be discussed deeper in the meeting.
“The focus will be on two shared aquifers in Limpopo and Orange-Senqu basins and support for equitable access to water that balances urban and rural needs with ecosystem requirements under a changing climate,” said the department.
The project is meant to reduce climate vulnerability by promoting adaptation strategies for integrated trans-boundary water resources management.
The project funders are USAID and Swiss Agency for Development and Cooperation (SDC).
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tralac’s Daily News selection: 28 July 2015
The selection: Tuesday, 28 July
To follow the @ICTSD/SAIIA Regional Trade discussion: #SADCintegration, @markschoeman
SADC Energy Ministers: communique
Ministers resolved to fast track implementation of priority regional transmission projects in order to connect Angola, Malawi and Mozambique. The projects include Zambia-Tanzania-Kenya (ZTK) Interconnector; Mozambique-Malawi Interconnector; Namibia-Angola Interconnector. The Ministers also noted progress on Zimbabwe-Zambia-Botswana-Namibia (ZIZABONA) Transmission Project as well as Mozambique-Zimbabwe-South Africa (MOZISA), which are meant to relieve congestion on the regional grid to facilitate electricity trade.
The Ministers commended the DRC and South Africa for ratifying treaty on development of Grand Inga Hydropower project. RSA was advised to accelerate signing of inter Governments Memoranda of Understanding (IGMOU) for future evacuation of power from Grand Inga to RSA and neighbouring Member States. Ministers also commended the World Bank for the financial assistance to the SAPP for purposes of setting up a Project Advisory Unit (PAU) and seed funds for project packaging in order to accelerate implementation of regional projects.
Fact Sheet: Power Africa (The White House)
SADC-China Infrastructure Investment Seminar: update (FOCAC)
Financial inclusion in the SADC region: fact sheet (FinMark Trust)
FinMark Trust is due to publish a book titled, 'An excluded society? Financial inclusion in SADC through a FinScope lens'. The book includes cross-country comparisons of financial inclusion Indicators of 12 SADC countries using findings from the FinScope Consumer Surveys. This fact sheet contains a summary of the book and as such it provides key facts about financial inclusion in the SADC region.
In total, 66% of adults in the region are financially included (including both formal and informal financial products/services) which is around 83.5 million individuals. Overall levels of financial inclusion vary considerably across the region from 90% in Mauritius, 86% in South Africa to 40% in Mozambique. Mauritius, South Africa, BLNS countries, and Tanzania show the highest levels of overall financial inclusion.
RBZ disputes $7,5bn in informal sector (The Herald)
The Reserve Bank of Zimbabwe has disputed claims that an estimated $7,5bn is circulating outside the formal banking system. Reserve Bank of Zimbabwe director for bank supervision Mr Norman Mataruka told the Oxylink mobile money and digital payments conference it was impossible such a huge amount of money could be changing hands in the informal sector. “If $7,5bn outside the formal banking system, then where do those particular people do their shopping, where do they buy? Do they just keep the money like gold, which is in a safe,” he asked, adding that even RBZ Governor John Mangudya did not agree with the claims. But Small to Medium Enterprises and Co-operative Development Permanent Secretary Ms Evelyn Ndlovu said $7,5bn was circulating in that sector.
The battle between Africa’s mobile phone companies and banks is a boon for financial inclusion (Quartz)
Zimbabwe: Mobile money activities total $6,1 billion (NewsDay)
Housing microfinance value chains study: TOR (FinMark Trust)
Namibia: NTIP a precursor to a national single window (New Era)
Schlettwein added that the implementation of the Namibia trade information portal is a key precursor to the establishment of the national single window (NSW). “The single window initiative, which was approved by cabinet in February last year, will benefit from better inter-governmental cooperation and coordination already prevailing within the portal expedited trade-related activities. Indeed, the national single window will also offer to the trade community a one-time, single-point submission of all the required documentation to all trade related entities for either import, export or transit procedures and provide all relevant trade related documents,” said Schlettwein.
Namibia: Dairy industry in dire straits, again (New Era)
Rwanda spearheads one area network for Central Corridor (New Times)
If it works as hoped, mobile phone users shall pay a uniform tariff to place a voice call from Rwanda to Tanzania or to Burundi, a development likely to significantly ease the cost of telecommunication services among East African Central Corridor countries. The One Area Network (ONA) is just one of 10 ambitious development clusters that Tanzania, Rwanda, Burundi, Uganda and the DR Congo have agreed to jointly implement under the Central Corridor infrastructure projects development initiative. Senior technocrats from the five Central Corridor trading partners, today, end a two-day meeting in Kigali, whose objective was to prepare a mutually acceptable implementation framework for the projects. The technocrats’ meeting is a precursor to an inter-governmental council of Central Corridor ministers of East African affairs, infrastructure and transport, which kicks off tomorrow.
EALA commences annual planning meeting in Kampala (EAC)
The meeting is also expected to receive a review report of activities of the last half of the Financial Year 2014/15 (January to June 2015). Arising from the Planning Meeting, EALA’s Work Plan and Legislative calendar is expected as is feasible to be in synchrony with that of the EAC. The Office of the Clerk in coming up with the draft Legislative Calendar took note of the activities of the wider EAC. The Speaker of EALA, Secretary General of the EAC and the President of the East African Court of Justice (EACJ) regularly meet to review progress and keep abreast with developments.
EALA Speaker implores stakeholders to act and think regional to boost integration (EALA)
Increased visa fees in Uganda raise questions about travel in the region (The East African)
Africa to negotiate for better terms at WTO meet (The East African)
Africa must demand new global copyright rules in the forthcoming World Trade Organisation meeting to be held in Nairobi at the end of the year. The rules would empower the continent to gain from global trade, since the current rules, known as Trade-Related Aspects of Intellectual Property Rights (Trips) under the Doha Declaration, favour developed nations. "What African countries need to do today is to make progress and embrace new challenges. The negotiations in December should address needs and solutions for the continent," said Mukhisa Kituyi, UNCTAD secretary-general. Dr Kituyi said the Doha agenda did not adequately reflect the problems of Africa today.
WTO members remain divided on how to advance agriculture negotiations
Since the last meeting in June, two papers on domestic support were submitted by Canada and Australia and by Norway. The paper submitted by Australia and Canada highlights that some of the larger WTO members have a lot of “space” between the total trade-distorting domestic support allowed under the WTO Agreement on Agriculture and the actual amount of domestic support they are providing. This suggests, in their view, that a cut in the overall trade distorting support (OTDS) would “cut into water, not into blood”.
“OTDS has proved to be one of the most contentious issues,” said Ambassador John Adank, Chair of the agriculture negotiations. “This is because exemptions provided for some members in the draft modalities have been put into question by some other members, who argue in favour of comparable disciplines for all large subsidizers.”
Angolan company to build submarine cable station in Brazil (MacauHub)
Angola Cables will manage the 6,165-kilometre fibre-optic cable, which will link Luanda to Fortaleza, within the framework of the Atlantic Cable System, making it possible to connect Africa and South America, initially and later North America, when the Monet system starts operating, which will be a fibre-optic cable linking Fortaleza and Santos in Brazil to Miami, in the United States as part of initiative by Angola Cables, Algar Telecom, Google and Antel Uruguay.
Rovuma LNG: how price is determined and what it means for government revenue (CIP)
The future price of Liquefied Natural Gas is largely outside the control of Mozambique; it will be determined by international market prices. But government revenue will also be determined by the long-term gas sales agreements currently being negotiated by Anadarko and ENI, and by the way in which the vague valuation clauses in the 2006 contracts are interpreted. The sales agreements for Rovuma LNG are being negotiated at a time when gas prices are more volatile than ever. Past projections for government revenue have been based on price forecasts for Asian LNG that are no longer credible due to shale gas production in the United States and plummeting international oil prices. Lower prices mean less government revenue and might put the future expansion of Rovuma LNG at risk. [Download]
How to make zones work better in Africa? (World Bank Blogs)
There was a broad consensus among the members on the panel [during the China-Africa Investing in Africa Forum] on the lessons of success of Chinese zones and on what can be applied in Africa; the reasons for limited success of earlier SEZs in Africa; and that promising future for African zones. For zones to attract investment, create jobs and have positive spillovers in the local economy, the panel agreed that the following conditions need to be met:
Uganda: The Shoprite exit was evident but just delayed (Daily Monitor)
The East African market, according to Waiyaki has become too competitive with fast-paced and ambitious expansions of regional retail giant mostly especially Nakumatt. However, Shoprite’s exit could have been informed by the organic growth of Kenyan–based regional giants including Nakamatt, Uchumi and Tuskys among others. The growth, notwithstanding that some, such as Uchumi have problems at home (Kenya), has been massive, overtaking Shoprite which had been in the country for about 15 years now.
Africa's next generation of multinationals? 9 firms that show wave of new kids on the block (M&G Africa)
José Graziano da Silva: 'How bio-fuels can increase food security' (New Times)
In some land-locked African countries, gasoline costs three times the global average, making fuel prices one of the main barriers to agricultural growth. Extending the use of bio-fuels in these regions could boost productivity and create new employment opportunities, especially in rural areas. The effect could be made even stronger if the additional demand for feedstock created by bio-fuels was met by family farmers and small-scale producers.
Ban welcomes UN Assembly’s endorsement of action plan on post-2015 development financing (UN News Centre)
The United Nations General Assembly on 27 July 2015 endorsed the new global action agenda for financing sustainable development adopted two weeks ago by a major UN conference, and Secretary-General Ban Ki-moon welcomed the move as a major step that firmly puts the world “on the path to a more prosperous, just and sustainable world for this and future generations.”
Mukhisa Kituyi: 'Five ways to ignite intra-African trade in services to support growth' (The East African)
EAC partner states look to benefit from more trade deals with the US (The East African)
Chinese financing to Mozambique increases 160 pct in 2 years (MacauHub)
Minister Tonela confident in use of local sugar by Mozambican soft drinks industry (Club of Mozambique)
Zimbabwe: Sign up, diamond firms ordered (The Herald)
Karl P. Sauvant: 'The international investment law and policy regime - challenges and options' (E15Initiative)
Transnational corporations, Vol 22 is posted (UNCTAD) vol 1, vol 2, vol 3
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34th Meeting of SADC Energy Ministers
The 34th Meeting of the Ministers responsible for Energy in the Southern African Development Community (SADC) was held on the 24th of July 2015, at the Sandton Convention Centre, in Johannesburg, South Africa. The meeting was preceded by preparatory meeting of Senior Energy Officials from 21 to 23 July 2015. The objective of the meeting was for Ministers to note progress, make decisions and give guidance on implementation of the SADC Energy Programme whose aim is to facilitate and coordinate availability of sufficient, reliable, least cost energy services in the SADC Region.
The meeting was officially opened by the Minister of Energy, South Africa, Ms Tina Joemat-Pettersson, who expressed her gratitude to the SADC Ministers responsible for Energy for attending the meeting. The meeting was chaired by the Minister of Energy and Power Development from Zimbabwe, Hon. Dr. Samuel Undenge. Hon. Kitso Mokaila, Minister of Minerals, Energy and Water Resources, and Deputy Chair of SADC Committee of Ministers responsible for Energy gave a vote of thanks on behalf of his colleagues and the delegates.
The Meeting was attended by the following Ministers and Deputy Ministers responsible for Energy:
- Republic of Angola: Hon. Joao Baptista Ventura (Secretary of State)
- Republic of Botswana: Hon. Kitso Mokaila,
- Democratic Republic of Congo: Hon. Maguy Rwakabuba Ribagiza
- (Deputy) Kingdom of Lesotho: Hon. Selibe Mochoboroane
- Republic of Malawi: Hon. Bright Msaka
- Republic of Namibia: Hon. Kornelia Shilunga
- (Deputy) Republic of Seychelles: Hon. Didier Dogley
- Republic of South Africa: Hon. Tina Joemat-Pettersson
- (Deputy )Republic of South Africa: Hon. Thembisile Majola
- (Deputy) Kingdom of Swaziland: Hon. Jabulile Mashwama
- Republic of Zambia: Hon. Charles Zulu (Deputy)
- Republic of Zimbabwe: Hon. Dr. Samuel Undenge
Apologies were received from Madagascar, Mauritius, Mozambique and Tanzania.
The representative of the SADC Executive Secretary, who is also the Director of Infrastructure and Services, Mr. Remigious Makumbe, in his introductory remarks paid tribute to the Ministers for their continued guidance to the implementation of energy programme. Mr Makumbe also thanked Cooperating Partners for their support to the regional energy programme. He informed the meeting that Summit approved the Revised Regional Indicative Strategy of Development Plan (RISDP) and Implementation Framework of 2015-2020 and the SADC Industrialisation Strategy Roadmap and Action Plan at their Extra-Ordinary meeting of April 2015; and that these strategic documents identify energy as one of the main drivers of economic growth.
The Ministers considered the power supply and demand situation in the Region and noted with concern the capacity shortfall of 8,247 MW. Ministers also noted that in 2014, the mainland Member States commissioned generation capacity amounting to 1999 MW as follows: Angola 150 MW; South Africa 1654 MW; Mozambique 150 and Zambia 245 MW from rehabilitation and new projects; about 83% of that installed capacity was generated from renewable energy based resources (solar, wind and hydropower especially through the Renewable Energy Independent Power Producer Procurement Programme [REIPPPP] in South Africa).
Ministers further noted that, the Region plans to commission 2,763 MW in 2015 mainly from Democratic Republic of Congo with 430 MW; Mozambique 205 MW; South Africa 1,828 MW; Tanzania 150 MW; Zambia 135 MW; and Zimbabwe 15MW. The Region also plans to install additional 24,062 MW of new generation capacity by 2019 in order to address generation deficit of which 70% is expected from renewable energy sources (hydro, wind and solar).
Ministers resolved to fast track implementation of priority regional transmission projects in order to connect Angola, Malawi and Mozambique. The projects include Zambia-Tanzania-Kenya (ZTK) Interconnector; Mozambique-Malawi Interconnector; Namibia-Angola Interconnector. The Ministers also noted progress on Zimbabwe-Zambia-Botswana-Namibia (ZIZABONA) Transmission Project as well as Mozambique-Zimbabwe-South Africa (MOZISA), which are meant to relieve congestion on the regional grid to facilitate electricity trade.
The Ministers commended the Democratic Republic of Congo and the Republic of South Africa for ratifying treaty on development of Grand Inga Hydropower project. RSA was advised to accelerate signing of inter Governments Memoranda of Understanding (IGMOU) for future evacuation of power from Grand Inga to RSA and neighbouring Member States.
Ministers also commended the World Bank for the financial assistance to the SAPP for purposes of setting up a Project Advisory Unit (PAU) and seed funds for project packaging in order to accelerate implementation of regional projects.
Ministers noted that twelve (12) out of the fifteen (15) SADC Member States have introduced regulatory oversight in the form of an energy or electricity regulatory agency and that the remaining Member States are at different stages of the process.
The Ministers noted that so far only Namibia and Tanzania reached cost reflective tariffs. The Ministers readjusted the timeframe of their previous decision and reaffirm their commitment to ensure that the SADC Region reaches full cost reflective tariffs by 2019.
The Ministers noted developments at continental, regional and national level relating to the UN Sustainable Energy for All (SE4All) Initiative whose principal objective is to achieve Universal Energy Access by 2030 through: ensuring universal access to modern energy services; doubling the rate of improvement in energy efficiency; and doubling the share of renewable energy in the global energy mix. The Ministers noted the proposed Sustainable Development Goals (SDGs) and especially SDG 7, 9, 12 and 13 on energy access, industrialisation, sustainable usage of natural resources and combating climate change which are in line with SADC objectives and Regional development priorities.
The Ministers approved establishment of SADC Centre for Renewable Energy and Energy Efficiency (SACREEE) and that the Republic of Namibia should host the Centre. They also commended United Nations Industrial Development Organisation (UNIDO) and Austrian Development Agency (ADA) for their generous contribution towards establishment of Centre.
The Minister responsible Energy from Malawi offered to host the 35th SADC Energy Ministers Meeting in 2016.
At closure, the Deputy Minister of Energy, South Africa, Hon. Thembisile Majola, thanked all Ministers for attending the meeting and for their valuable contribution during the deliberations.