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How bio-fuels can increase food security
Over the past several years, bio-fuels have become a bone of contention. For some, a renewable energy source produced from organic matter amounts to a magic wand in the fight against climate change. Others view bio-fuels as an existential threat, because the plants used to create them compete for agricultural land and water that would otherwise be used to grow food.
But this is a false dichotomy. The choice cannot be between food and fuel. We can make good use of both. Given the right conditions, bio-fuels can be an effective means to increase food security by providing poor farmers with a sustainable and affordable energy source.
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.
Bio-fuels have become a fact of life, and their use is expected to continue to increase steadily.
In 2013, bio-fuels accounted for 3 per cent of the total transport fuel used around the world, according to a report by the Food and Agricultural Organisation and the Organisation for Economic Co-operation and Development (OECD). While this percentage is expected to remain steady, we can nonetheless expect the production of bio-fuels to grow in absolute terms as the global market for transport fuels also expands.
Indeed, global bio-fuel production is projected to be double by 2023 relative to its level in 2007. If that prediction is borne out, bio-fuels will consume 12 per cent of the world’s coarse grain, 28 per cent of its sugar cane, and 14 per cent of its vegetable oil.
As production of these fuels grows, we will require policies, programmes, and capacities that ensure that they are used sustainably, without distorting food markets or compromising food security, which will always be the first priority.
The pioneers of bio-fuels would probably be surprised by how little they contribute to the total world fuel supply today. Rudolf Diesel’s first engine, designed in the late 1800s, ran on fuel derived from peanut oil.
Henry Ford once scouted Florida in hopes of buying tracts of land to plant sugar cane, convinced that the United States would not tolerate the pollution from burning fossil fuels or the dependency implicit in importing oil to produce gasoline.
Only in recent decades have bio-fuels regained their original appeal, owing to efforts to secure affordable energy, generate income, and mitigate the dependency of which Ford warned.
More recently, concerns about pollution, climate change, and the finite nature of fossil fuels has driven a spike in demand – one that must now be managed.
Flexibility is key to efforts to leverage the world’s growing reliance on bio-fuels to boost agricultural productivity, accelerate rural development, and increase food security. For example, policymakers must defuse the competitive pressures between food and fuel by designing schemes to counter price volatility for basic foodstuffs.
Authorities could require that the percentage of bio-fuels blended with conventional fuel be increased when food prices drop and cut when they rise. This would serve as a sort of automatic stabiliser. Poor farmers would continue to enjoy robust demand for their products even when food prices dropped, and consumers would be protected from rapid or excessive price increases.
National targets could also be made more flexible. If mandates for bio-fuel use were applied over several years, instead of only one, policymakers could influence demand in order to minimise pressure on food prices.
Finally, at the individual level, greater flexibility could also be built in at the pump, through the promotion of flex-fuel vehicles of the type already in use in Brazil. If cars are equipped with engines that can run on conventional fossil fuels or blends with high percentages of bio-fuels, consumers can adapt to changes in prices by switching between one or the other.
Finding the right balance will not be easy. But if we harness our collective knowledge, include developing countries’ smallholder farmers in this effort, and maintain our focus on reducing poverty and protecting the vulnerable, we can have more fuel, more food, and greater prosperity for all.
The writer is the Director General of the United Nations Food and Agriculture Organization (FAO).
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U.S. President on historic visit to the African Union
The President of the United States of America Barack Obama will on Tuesday 28 July 2015, pay an official visit to the African Union Headquarters in Addis Ababa, Ethiopia. President Obama will be the first U.S. President to ever visit the African Union.
Upon arriving to the AU Headquarters, President Obama will hold a bilateral meeting with the African Union Commission Chairperson Dr. Nkosazana Dlamini Zuma and Commission-ers.
President Obama is also due to deliver a speech to the continent from the Nelson Mandela Hall at the AU Conference Centre, in Addis Ababa, Ethiopia.
“This is an historic visit to the African Union. And it will be my great pleasure to welcome President Barack Obama to the AU,” said the AU Commission Chairperson on the eve of the visit, adding that “it is also another concrete step to broaden and deepen the relationship between the AU and the US.”
During the visit, the AU Commission Chairperson will take the opportunity to present Africa’s priority areas as articulated in the Agenda 2063 framework document and the 10-year implementation plan, aimed at achieving Africa’s vision for prosperity, integration and peace.
Pledging his support to strengthen Africa-US relations President Obama had told AU the Commission when they met on 29 June 2013, in South Africa:
“We stand ready and eager to work with the African Union for the best engagement of the United States with Africa. If there is a strong African Union, any help that is provided by the US becomes more effective than us doing things on our own.”
The visit will offer the opportunity for both Dr. Dlamini Zuma and President Obama to further the discussions held in June 2013 in South Africa, and during the U.S.-Africa Summit in August 2014 in Washington DC.
Among the important issues will be skills revolution to provide the youth with employment opportunities; industrialization and infrastructiural development and agro-processing.
In addition, expected to feature in both the bilateral and the speeches are issues around, but not limited to, education, youth and women’s empowerment, trade, investment, and peace and security, particularly the fight against terrorism and extremism.
The AU Commission will also be engaging and discussing with a delegation of Senators and Congressmen travelling with the U.S. President.
President Obama will be arriving to Ethiopia after participating and speaking at the Global Entrepreneurship Summit in Nairobi, Kenya.
Previous visits of President Barack Obama to Africa include: Egypt in June 2009, Ghana in July 2009, South Africa, Senegal and Tanzania in 2013.
Statement of the Chairperson of the African Union Commission, on the occasion of the visit of Honourable Barack Obama, President of the United States of America, to the African Union, 28 July 2015
It is a great pleasure to welcome You Honourable President of the United States of America, and the US delegation to the headquarters of the African Union, and specifically to Nelson Mandela Hall. This is the first-ever visit to the headquarters of the Organisation of African Unity, now the AU.
Africa and the USA have strong and historic bonds, forged with the blood and sweat of African sons and daughters captured and forced across the Atlantic ocean, toiling on the plantations and cities that made the United States into the great country it is.
Today we are proud that Africans are part of the beautiful tapestry of humanity of the United States of America, with their rich contribution to its history, literature, music, sciences, politics, business, the arts and sports.
Honourable President, although we welcome you as the President of the United States of America, Africa also claims you as our own, because everyone of African descent remains an integral part of us.
We warmly welcome the Congressional delegation, and recall their unwavering bipartisan support, and the support of ordinary Americans, to our struggles against colonialism and apartheid.
Citizens of the United States contributed to African development, in education and other areas, producing leaders such as Pixlie Ka Seme, Wangari Mathaai, and William Tolbert, to name but a few.
The high school that I attended, Adams College in Durban, was founded 162 years ago in 1853 by American missionary Newton Adams and educated many prominent leaders across the continent, including the first Nobel Peace Laureate in Africa, Chief Albert Luthuli of South Africa and other leaders like Seretse Khama (Botswana), Joshua Nkomo (Zimbabwe), Milton Obote (Uganda), ZK Matthews (South Africa), Henry Majula (Zambia) and Charles Njonjo (Kenya).
During the 1960’s, a young Kenyan Tom Mboya lobbied for opportunities for young Africans to study in the US, and created the African American Students Foundation (AASF). Mboya and others convinced President John F Kennedy to support this effort, starting with what became known as the ‘Student Airlift’ and gaining government support to African students to study in the US over the next two decades.
The ties that bind us together, therefore go back a long time, and are strong and enduring.
This visit comes at a time when the African continent has adopted a framework for its development for the coming fifty years, Agenda 2063, the Africa we want.
Africa is a youthful continent and likely to remain so over the next few decades. By the end of this century, one in three of the world’s population will be African. Over half of its population are women. Our people therefore remain our most precious resource.
It is for this reason that Africa is embarking on a skills revolution, to educate and train its children, young men and women. Like the programmes President Kennedy introduced in the 1960’s and 70’s, we would appreciate similar cooperation with the USA and African universities to help train new generations of African scientists, engineers, entrepreneurs and innovators. Young people such as Siya Xuza who at the age of 26 years has a minor planet named after him for his efforts towards the development of cheaper rocket fuel.
This visit also takes place a few months before the critical COP21 meeting in Paris on climate change and the post-2015 development agenda in New York. Even though Africa contributes the least to emissions, it is amongst the most affected by climate change. As we seek to industrialise, increase manufacturing, modernise agriculture and agro-processing, develop the blue economy, and grow our private sector, we are mindful of our responsibilities to humanity and future generations.
Africa is therefore in a unique position to chart a development and industrialisation path that is different, through renewable energy and climate-smart agriculture.
But we do require the cooperation of our partners and the USA, through technology transfer, and investments in infrastructure development, renewable energy and our blue and green economies so that we develop without destroying the planet.
In addition to energy infrastructure, Africa also wants to take advantage of technology to leapfrog development in transport and other infrastructure; connecting our commercial centres, rural areas and cities through rail, highways, marine transport, aviation and broadband.
Just last month, we launched negotiations for the Continental Free Trade Area, to enhance intra-Africa and global trade and investments, contribute to the free movement of goods, services and peoples, the development of the private sector and Africa’s attractiveness for foreign direct investments.
Honourable President,
Your visit takes place during the 70th anniversary of the UN, when we recall the founding Declaration that proclaimed
the recognition of the inherent dignity and of the equal and inalienable rights of all members of the human family as the foundation of freedom, justice and peace in the world.
As Africa celebrated its 50th anniversary in 2013, we vowed not to bequeath war and conflicts to future generations of Africans. Africa therefore remains a reliable partner to build a peaceful and just world envisaged by the Declaration and African sons and daughters are at the forefront of peace-building and peacekeeping missions, not only across the continent but also in other regions of the world.
The African Union therefore continues to work with the United Nations. Whilst Africa is willing to make its financial contributions towards peacekeeping, we need the assistance of the UN and partners, to ensure predictable finance for our efforts. As we do this work, we must at the same time correct the historical injustice of Africa being the only continent left out from permanent membership of the UN Security Council.
Though we are making progress, challenges remain. We are as concerned as you are with the global threats of terrorism and extremism and Africa is playing its part in the fight against Al Shabaab and Boko Haram. South Sudan and Libya area also major challenges, and we hope that the IGAD process will bear fruits by the next scheduled meeting.
We must all work to build greater tolerance for religious, cultural and political diversity, and build inclusive societies.
Corruption as a global phenomenon is of great concern to us. Contrary to popular perceptions of corruption in Africa, the report of the panel chaired by former President Thabo Mbeki on the Illicit Financial Flows from the continent (amounting to over 50 billion US dollars per year) shows, that over 60% of these outflows are as a result of the activities of large commercial companies, with criminal activity accounting for a further a 30% and political corruption less than 10%.
We must therefore tackle this issue head-on, based on accurate diagnosis of where the problem lies, and through collective action.
Africa is also taking on its responsibilities in the fight against disease, as shown in the recent fight against the Ebola Virus Disease, through the deployment of ASEOWA and the operationalization of the African Centre for Disease Control to prevent similar outbreaks.
We once again thank the USA, the African private sector and other partners for contributing towards this effort.
Africa knows that its development will be much slower, unless it invests in its girls and women. We are making progress, with twenty-three African countries now having more than 30% women in parliament (with Rwanda leading the world).
As we celebrate 2015 as the African Year of Women empowerment for the realisation of Agenda 2063, we are committed to advance women and girls in every area of human endeavour – in education, science, technology, mathematics and research; in agriculture and agro-processing, as entrepreneurs and in the judiciary. We are also taking steps to address violence, in conflict and in peacetime, as well as other harmful cultural practices against girls and women.
Women’s empowerment is not only a human rights issue, but also makes economic sense, and is a guarantee for sustainable peace, community stability and cohesion. It contributes to the prosperity of families and communities, especially since women on average contribute 70% of their income to the household, whilst men on average only contribute 30% of their incomes towards households and communities.
Investing in women therefore is critical to shared prosperity and to Africa becoming a prosperous, integrated, peaceful, people-centered continent, playing a dynamic role in the world.
It is all these factors that make us confident that we are on the right track with our Agenda 2063, the Africa we want.
We do know that in the words of Nelson Mandela, after climbing one great hill, there are many more hills to climb.
But we are convinced that Africa shall – like the great marathon runners of Ethiopia – conquer these hills.
The United States of America is an important force in global affairs, and we have been taking the relationship between our continent and your great country to new levels, not least as a result of your leadership in convening the first US Africa Leadership Summit last year, your support for agriculture and developing young African entrepreneurs.
We are also very pleased to have with us the high level delegation from the US Congress, who played a pivotal role in the bipartisan support to Africa, including more recently the extension of AGOA.
Africa remains seized with the issues facing its Diaspora everywhere, and we therefore applaud your leadership towards the normalisation of relations between the USA and Cuba.
It seemed impossible when in 1973, President Fidel Castro in an interview predicted that a resolution shall be found when the US has its first black president, and the world has a Latin American Pope. We wish you Honourable President and the Cubans, all the best in these endeavours.
As President Mandela said, it looks impossible, until it is done. Martin Luther King Jnr predicted that the USA shall have a black President, within 25 years. It took 44 years.
But today we have you Honourable President, who against all odds climbed Mt Everest of American politics, became a young Senator, and reached the highest office, in the midst of an economic crisis. You have steered America out of this crisis, and back on the road to recovery.
In electing you, the American people showed their belief in the oneness of humanity; that it did not matter that you had an African father, and American mother, a Muslim father and Christian mother. They looked at your humanity, as a person capable of leading them, rather than at the differences.
As Foreign Minister, when you were elected, I said that your election is an inspiration to every black person: that they can reach whatever aspirations they have, if they work hard and focus.
I now invite Honourable Barack Obama, President of the United States of America, to address the African Union.
Experts debate proposed EU-ECOWAS partnership agreement
Experts from Nigeria and the international community would converge on Abuja this week to chart a course for the Economic Partnership Agreements (EPA).
The Economic Community of West Africa States (ECOWAS) and the European Union (EU) are negotiating the EPA. One of four candidates currently vying for the influential post of the Secretary-General of the Commonwealth, Sir. Ronald Sanders is expected in Nigeria, at the invitation of Africa Today, a leading pan-African newsmagazine.
Sir Sanders is to deliver the keynote address at the international conference on the EU-ECOWAS Economic Partnership Agreements (EPAs). The conference organized by Africa Today will take place, July 28 to 29, at the Transcorp Hilton Hotel in Abuja.
The renowned diplomat and scholar, who is a Senior Research Fellow at the Institute of Commonwealth Studies, University of London, is expected to share and give his insight into international trade negotiations, most especially as they pertain to the EU and African, Caribbean and Pacific (ACP) group of countries, with members of the Nigerian business community and government officials.
Sir Sanders has considerable experience in international trade negotiations especially with the European Union (EU). He was a member of the Caribbean team that negotiated with the EU on their EPA. Aside that he was also a former Ambassador to the old European Economic Community (EEC) and the World Trade Organisation (WTO).
The Caribbean region has since signed their EPA with the EU. Justifying inviting Sir Sanders to Nigeria, publisher of Africa Today, Mr. Kayode Soyinka, said in Abuja: “I sit with Sir Sanders on The Round Table – the Commonwealth Journal of International Affairs, which has been publishing since 1910.
And I have been very privileged from that close quarter to know and respect his views on the EPA, which are very progressive and I would like my people here in Nigeria, in particular, and ECOWAS and Africa in general to listen to him. That is why we are bring him to Abuja for this EPA conference as the Keynote Speaker.”
Soyinka added that “Nigeria, most especially members of the Manufacturers Association of Nigeria (MAN), the National Association of Nigerian Traders (NANT) NACCIMA – the chambers of commerce, and of course the consumers, can get the benefit of the Caribbean experience from someone like Sir Sanders close to the center of the negotiations.
Sanders has a progressive view about the EPA and his views will be beneficial, insightful and an eye opener for Nigeria, ECOWAS and the AU. His contribution to the discussion in Abuja will go a long way in deciding whether it is helpful for and beneficial to Nigeria, ECOWAS and Africa as a whole to sign the EPA or not”.
As Africa’s economic powerhouse, other countries on the continent will certainly take their cue from Nigeria’s decision. The EPA, a controversial issue over the years, is a reciprocal preferential trade agreement being promoted by the EU to create a Free Trade Area [FTA] between the EU and the African, Caribbean and Pacific Group of States [ACP] through six regional economic communities into which the ACP is divided.
The ECOWAS Commission, one of the six regional economic communities, negotiated agreement on behalf of the 16 countries in West Africa, including Nigeria. The agreement was concluded in July 2014 after 11 years of negotiations. Nigeria has expressed reservations on the agreement’s current form due to the perceived economic implications to its economy.
Background
An international conference to critically examine the merits or otherwise of Africa signing the Economic Partnership Agreement (EPA) is scheduled to hold in Abuja, Nigeria’s capital, July 28-29. Organised by Africa Today, the London based pan-African news magazine, the conference hopes to beam the spotlight on the agreement that has split the continent into two: those countries wanting to sign and those not wanting to unless the continent gets a more favourable deal.
The conference is expected to put the EPA on the front burner of national discourse, enlighten ordinary citizens and business people, examine the agreement’s pros and cons as they affect Nigeria’s economy and those of the countries in the west African sub-region. The EPA remains a thorny trade issue between Europe and Africa. The deadline for signing the agreement was missed last October and Europe is insisting it would not come back to the negotiation table.
The conference could not have come at a better time, at least for Nigeria. The country is Africa’s biggest economy and it has a new government in place; signing – or not signing – the EPA would be among its early major foreign policy actions. In addition, countries taking their cue from Nigeria’s reluctance to sign the agreement would want to know if the new administration would maintain the status quo or chart a new course relating to the agreement. The Goodluck Jonathan administration had gingerly avoided signing the agreement for a number of years. At an Extra-Ordinary Session of the Conference of African Union Ministers of Trade in Addis Ababa, Ethiopia in 2014, the then Minister of Industry, Trade and Investment, Olusegun Aganga, had come out openly against the agreement saying it wasn’t favourable to Africa. This was despite progress made by some regional blocs towards finalising the pact.
Aganga said then: “Nigeria’s position on EPA is very clear. Africa is on the rise. It is a very big and strategic market for any trading partner. That is what the EU wants from us but Africa must jealously protect what it has. We must not sign an agreement without first of all carrying out a robust economic analysis of the overall impact the agreement will have on the region, our children and future generations.” Aganga’s position was supported by trade ministers from other African countries and AU’s Commissioner for Trade and Industry, Fatima Haram. The ministers, in backing Aganga, said the deal would have a long-term negative impact on the continent’s efforts towards industrialisation and job creation. It was even suggested at the meeting that should the negotiations continue along the same vein, Africa should consider other alternatives such as deepening intra-African trade ties and pushing for alternative arrangements with Brussels, such as the EU Generalised System of Preferences (GSP).
The trade ministers’ meeting was convened to discuss Africa’s common position ahead of the October 1 deadline for signing the EPA with EU; the establishment of the Common Free Trade Area, CFTA, by 2015; extension of African Growth and Opportunity Act, AGOA, by the United States for 15 more years and Africa’s strategic response to World Trade Organisation negotiations, among others. Nigeria’s decision not to quickly sign on the dotted lines is, perhaps, the best position considering what it might lose when the country’s borders are thrown wide open to European goods. However, how it intends to navigate the murky waters of international trade to get the best possible deal for the country and indeed the west African sub-region remains uncertain.
The EPA conference has been endorsed by various Nigerian government agencies thereby underscoring its importance to the country. The Federal Ministry of Industry, Trade and Investment, in a letter signed by Felix Asikpata, director (Trade), acknowledged that the EPA conference will “provide another platform to discuss the salient and contentious issue in the EPA as well as further educate the key stakeholders.” The National Planning Commission (NPC) too has endorsed the conference and is offering technical advice. Members of the Organised Private Sector, especially from the manufacturing sector, have also endorsed the conference. Also the Bank of Industry, ECOWAS, Manufactures Association of Nigeria (MAN), National Association of Nigerian Traders, the Nigeria Custom Service and other stakeholders have given the conference their seal of approval. They are mostly to be affected if and when the deal is signed.
The list of confirmed speakers for the two-day conference underscores its significance. Drawn from a wide array of sectors including the academia, trade, diplomacy, government, manufacturing and the banking industry, speakers include Ademola Oyedeji, emeritus professor of economics, University of Ibadan and chairman, Center for Trade and Development Initiatives (CTDI), Rasheed Olaoluwa, managing director of the Bank of Industry, S.U. Jacobs, president of the Manufacturers Association of Nigeria, and Ken Ukaoha, president, National Association of Nigerian Traders. The conference will also be addressed by Sir Shridath Ramphal, former secretary general of the Commonwealth and Sir Ronald Sanders, member of the Commonwealth Eminent Persons Group, who will also be the conference keynote speaker. Sanders, one of the four candidates vying for the post of the Commonwealth Secretary General, was involved in the EPA negotiation the Caribbean had with the EU and his experiences will be of immense benefit to the conference. Part of the activities of the international conference is the Africa launch of the memoirs of Sir Shridath Ramphal which was launched in the UK last year.
The EPA is a reciprocal preferential trade agreement being promoted by the EU to create a Free Trade Area FTA between the EU and the African, Caribbean and Pacific Group of States ACP through six regional economic communities into which the ACP is divided. The ECOWAS Commission, one of the six regional economic communities, negotiated the agreement on behalf of the 16 countries in west Africa, including Nigeria. The agreement, which was concluded in July 2014 after 11 years of negotiations, has been contentious over the years. Nigeria expressed reservations over the agreement’s current form due to the perceived economic implications to its economy. When the agreement is signed African countries are expected to open their borders to goods and products produced in the EU with the EU reciprocating by allowing goods and products produced in Africa into their countries.
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Addis Ababa Action Agenda: Ban welcomes UN Assembly’s endorsement of action plan on post-2015 development financing
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.”
General Assembly President Sam Kutesa said today’s action “will further demonstrate our collective commitment towards eradicating poverty, achieving sustainable development and building a better future for all,” and urged UN Member States to “do whatever it will take to ensure that the Addis Ababa Action Agenda is fully implemented.”
The outcome document adopted at the Third International Conference on Financing for Development, which took place in Addis Ababa, Ethiopia earlier this month, the Action Agenda contains a series of bold measures to overhaul global finance practices and generate investments for tackling a range of economic, social and environmental challenges.
Building on the outcomes of previous development financing conferences held in Monterrey, Mexico, and in Doha, Qatar, the Action Agenda also addresses all sources of finance, and covers cooperation on a range of issues including technology, science, innovation, trade and capacity building.
In his statement to the Assembly, Mr. Ban said by endorsing the Addis Ababa Action Agenda, “we launch a new era of cooperation and global partnership.”
He hailed the development as the foundation for success at the UN summit to adopt the UN post-2015 development agenda, in New York this September, and at the Conference of Parties of the UN Framework Convention on Climate Change (UNFCCC), known informally as COP 21, in Paris in December.
“Only by staying engaged will we ensure that the commitments we endorse today will lead to tangible progress on the ground, in all countries and for all people,” the UN chief said.
Commending UN Members States for taking this critical step forward, he declared: “We are now firmly on the path to a more prosperous, just and sustainable world for this and future generations.”
Earlier this morning, Mr. Ban and Member State representatives paid tribute in a General Assembly session to the late Permanent Representative of Djibouti, Ambassador Roble Olhaye, the longest serving top diplomat at the UN, calling him a passionate champion of Africa and a great believer in the value of the continent’s partnership with the United Nations.
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EALA Speaker implores stakeholders to act and think regional to boost integration
EALA wants stakeholders in the EAC to take advantage of the extra-ordinary opportunities that spur up with the integration process to make it a reality.
EALA Speaker Rt. Hon Daniel F. Kidega made the remarks on 22 July at a reception hosted by the Aga Khan Development Network (AKDN) in Kampala, Uganda to commemorate the 58th Anniversary of His Highness the Aga Khan’s accession as the 49th hereditary spiritual leader of the Shia Ismaili Muslims (Imamat Day).
The Speaker lauded the AKDN for being an exceptional partner to the region and said the future of the East African Community was bright.
“I want to acknowledge with much satisfaction and gratitude, the contribution of AKDN to the regional development,” Rt. Hon Kidega said.
“AKDN’s history in our region stretches back 100 years and today, you are engaged with each one of the EAC Partner States. The efforts of the Network in education, healthcare, culture, infrastructure development, economic growth, and tourism have benefitted numerous communities,” the Speaker added.
The Speaker hailed his Highness the Aga Khan for being at the forefront of effective development through the institutions of the AKDN.
He assured the AKDN of EALA’s total support with regards to the legal and regulatory environment to smoothen integration.
“In the regard, please feel free to work with us and suggest areas you feel relevant pieces of legislation may strengthen. As the peoples’ Representatives, EALA invites all stakeholders to collaborate closely to strengthen the integration process,” the Speaker noted.
In his remarks, the AKDN Regional Representative, Amb. Mahmood Ahmed spoke of the important role of meritocracy, pluralism and strong civil society in development indicating that “one must not make the mistake of lowering the bar because it’s the developing world, or because it’s Africa”. Noting Uganda’s strong pluralistic tradition he observed that “Harnessing the best in all of us means opening the way for diversity. It means welcoming plurality. Flourishing civilisations and great cultures have thrived because of their openness to diversity”.
The representative said AKDN was committed to improving the lives of the people of Uganda and in the region.
“This work is predicated on the ethic of respect for human dignity. Inherent to dignity is the ability to provide for oneself, to have safety and stability, to have a certain quality of life, to feel confidence and hope in the future, to feel a sense of belonging,” Amb Ahmed said.
The EAC and the AKDN recently penned a Memorandum of Understanding to foster collaboration.
The broad partnership inter alia includes initiatives in employment creation, income generation and poverty reduction in selected regions and sub-regions of the EAC Partner States. It also highlights the need for improvements to standards, quality and delivery of services, particularly in the fields of pre-tertiary and higher education, and healthcare, through public-private partnerships.
Plans around the establishment of Aga Khan University’s principal East African campus in Arusha, Tanzania are well on course with the construction process expected to begin soon and this elicited a positive reaction from the Speaker.
“I am excited at this news. Sitting at the nexus of the EAC, this new campus will host a range of academic programs at the undergraduate and graduate levels which will produce the thinkers, reformers, researchers and indeed transformers who will work towards improving the quality of life of the East African peoples,” Rt. Hon Kidega said.
“The regional University will also set up a number of centres or campuses in each Partner State. We are indeed looking forward to the innovation – which is billed to be an ‘East African institution for East Africans’,” the Speaker added.
His Highness the Aga Khan is the 49th hereditary Imam (Spiritual Leader) of the Shia Ismaili Muslims and Founder and Chairman of the Aga Khan Development Network. The agencies of the Aga Khan Development Network are private, international, non-denominational development organisations. They work to improve the welfare and prospects of people in 30 countries in the developing world, particularly in Asia and Africa. Their mandates include the environment, health, education, architecture, culture, microfinance, rural development, disaster reduction, the promotion of private-sector enterprise and the revitalisation of historic cities. AKDN agencies conduct their programmes without regard to faith, origin or gender.
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Deepening the US-Africa trade relationship: factsheet (The White House)
The United States plans to work with Congress to expand the Trade Africa Initiative to include new partners, including Cote d’Ivoire, Ghana, Mozambique, Senegal, and Zambia to identify activities that will improve compliance with WTO rules on trade facilitation, sanitary and phytosanitary measures, and technical barriers to trade; foster an improved business climate; and, address capacity issues that have constrained trade.
Remarks by President Obama at the Global Entrepreneurship Summit
Kenya-US: joint commitment to promote good governance and anti-corruption efforts in Kenya
Transcript of the Q&A by President’s Kenyatta, Obama
Global Entrepreneurship Summit: speech by President Kenyatta
Global Entrepreneurship Summit www
Kenya, US firms in talks on mega $26bn Lamu Port Southern Sudan-Ethiopia deal (M&G Africa)
Unleashing Africa’s entrepreneurs: improving the enabling environment for start-ups (Africapitalism Institute)
This report, launched on the sidelines of the 2015 Global Entrepreneurship Summit, is based on results from a series of surveys completed by African entrepreneurs in the Tony Elumelu Entrepreneurship Programme Network, which includes more than 20,000 members from all 54 countries in Africa. The results of the surveys were presented to various experts in banking, SME finance, business development, and economic policy, and further discussed in focus groups comprised of more than 100 entrepreneurs who participated in the surveys.
In many ways, the initial findings from the surveys, expert consultations and focus groups mirror previous insights gained from similar efforts. However, this report is unique in that the data is drawn from more than 5,000 surveys completed by small and emerging entrepreneurs from nearly every country in Africa. Likewise, the proposed solutions included in the report are derived primarily from entrepreneurs themselves with additional suggestions from experts on African entrepreneurship, investment, and business. Another unique aspect of this research is the way in which it will be used to effect tangible, positive changes in the enabling environment on behalf of Africa's entrepreneurs.
Elizabeth Littlefield: Kenya is exporting innovation on its way to becoming a ‘silicon savannah’ (Daily Nation)
Working in tandem, USaid and Opic have been able to accelerate and expand the one-two approach of providing technical assistance for government agencies in Africa, quickly followed by catalytic capital and risk management that brings in private investors. It has proven to be a highly effective formula in President Obama’s Power Africa initiative to expand energy access. The goal, of course, is to ensure that Africa does more than catch up with others. The goal is to give Africa every chance to lead. [The author is the president and CEO of the US Overseas Private Investment Corporation]
Starting today in Abuja: ECOWAS to review regional ICT strategy
The Economic Community of West African States is set to review its strategy on Information and Communication Technologies in light of significant developments in the sector and to ensure the continued development and integration of its Member States. The two-day workshop will feature participants from ICT related ministries and agencies from the 15 Member States as well as other stakeholders including regional groups and civil society organizations working in the area of Information and Communication Technology.
Starting today in Kigali: The Central Corridor Regional Clusters meeting is taking place in Kigali, 27-28 July. The mtg will review the Presidential Round Table resolutions and implementation plan for the Central Corridor Agency. [Updates from @MINEACRwanda]
This dialogue, 28-29 July, organised by ICTSD, with the collaboration of SAIIA, will be an opportunity to revisit several challenges facing Africa and Southern Africa in the context of new developments and data that have emerged in recent years. It will explore the implications of preferential trading schemes, the rise of south-south trade, the potential impact of mega-regionals, potential implications WTO Trade Facilitation Agreement, and international production networks. [Agenda]
Mozambique: Sugar industry protests at cheap imports (Agencia de Informacao de Mocambique)
Mozambican sugar producers on Thursday warned the Minister of Industry and Trade, Max Tonela, that the domestic market is being swamped by cheap, imported sugar, threatening the continued existence of the Mozambican industry. The warning came at a seminar as “Challenges of the Sugar Industry”, held in the sugar town of Xinavane, in Maputo province.
In Maputo, national producers find they are competing with Swazi sugar. In the central province of Manica, it is Zimbabwean sugar that is inundating the market. Malawian sugar is sold in Niassa and Tete provinces. On the coast, sugar from Asian countries such as India or Thailand is smuggled in, or dumped at prices below the costs of production, benefitting from the subsidies the governments of those countries pay to their sugar industries. The difference in price has become substantial - Mozambican sugar sells at an average price of 42 meticais (1.1 US dollars) a kilo, while the average price of the imported sugar is 38 meticais a kilo.
New World Bank boss for Southern Africa (NewsDay)
The World Bank has appointed a Chinese national, Guang Chen, as country director for seven Southern African countries including Zimbabwe. Chen, who began work on July 1 and is based in Pretoria, will oversee South Africa, Botswana, Namibia, Lesotho, Swaziland, Zambia, and Zimbabwe. Previously Zimbabwe, Zambia and Malawi were under the directorship of Kundhavi Kadiresan. Malawi now falls under the stewardship of Bella Bird who is also in charge of Somalia, Sudan and South Sudan. Prior to taking up this post, Chen served as the World Bank’s country director for Ethiopia, a position he held since 2011, where he oversaw the implementation of a portfolio of investment and trust fund projects valued at over $6 billion, as well as a robust programme of analytical works and technical assistance, the bank said in a statement.
UNCTAD opens first regional office in Africa to ‘Make Trade Work’ for the continent (UNCTAD)
Speaking at the inauguration, African Union Trade Commissioner Fatima Haram Acyl, said: “We would like UNCTAD to support us on Africa’s regional integration agenda, most especially the continental free trade area. We are already receiving significant support, but we need more.” Ms. Kategekwa, the newly appointed head of the office, said the office “will be central to delivering support to the African Union Commission and its member States in the process of negotiating the African Union CFTA”.
Inaugural meeting of AU's Strategic Task Force on the 2050 Africa’s Integrated Maritime Strategy: documentation
Reinforcing veterinary governance in Africa (IGAD)
The sixth VET-GOV Programme Steering Committee Meeting was held in Port Louis, Mauritius, on 22-23 July 2015. It was attended by the Steering Committee Members and other participants from AU-IBAR, OIE, FAO, EISMV, EAFF, Midzi agricultural Development Services Pty Ltd, BRENTEC VACCINES, RECs (COMESA, EAC, ECCAS, IGAD and SADC) and representatives from countries such as Botswana, Ghana, Kenya, Mauritius, and Zambia.
Ethiopia: Pathway to profitable women-owned enterprises (World Bank Blogs)
The Women’s Entrepreneurship Development Project is a $50 mill IDA investment lending operation designed to increase earnings and employment for women who own businesses in Ethiopia. It created the first ever women-entrepreneur focused line of credit in Ethiopia in 2013, and the demand has been staggering. Additionally, the project includes a cutting-edge entrepreneurship training program that equips Ethiopian women with business skills, as well as the ability to ‘think like an entrepreneur’. Top Five results of WEDP so far:
Wu Bin: 'Uplands of promise beckon for Chinese companies' (ecns)
It needs to be stressed that China's industrial parks in Africa are just in their infancy. They need time to develop, localize and blend into the local environment. Production has often been disrupted, mainly because different companies are at different stages of internationalization, and some are seriously hampered as a result of poor production and employment methods. Chinese companies that wish to build or invest in Africa should do thorough research before taking the plunge, and methodically look at areas in which they could invest. [The author is a senior researcher at the Chinese Academy of International Trade and Economic Cooperation]
Paris ministerial boosts UN climate talks, more national action plans released (Bridges, ICTSD)
Ministers and other high level officials from 46 countries made headway on the politically thorny issues that have stymied the UN negotiations to finalise the first-ever universal emissions-cutting deal during an informal meet in Paris, France held last week. Consensus emerged at the gathering that there should be a regular, five-year review of the collective effort to curb climate-warming greenhouse gases. National climate action plans will form the building blocks of new multilateral climate regime, set to replace the current Kyoto Protocol when it expires at the end of the decade, and geared towards keeping the world within a two degree Celsius rise from pre-industrial levels. How to track progress on, and scale up ambition where needed, has been a sticking point between parties. These plans have been steadily released by countries throughout the year and a flurry of new contributions were released over the past week.
Impacts on poverty of removing fuel import subsidies in Nigeria (World Bank)
Removing the subsidy on fuel is one of the most contentious socioeconomic policy issues in Nigeria today. In this paper, an economy-wide framework is used to identify the impact of removing the fuel subsidy on the Nigerian economy and investigate how alternative policies might be used to meet socioeconomic objectives related to fuel subsidies. The results show that although a reduction in the subsidy generally results in an increase in Nigeria’s gross domestic product, it can have a detrimental impact on household income, and in particular on poor households. Accompanying the subsidy reduction with income transfers aimed at poor households or domestic production of petroleum products can alleviate the negative impacts on household income.
AfDB hosts first APNODE AGM (AfDB)
The purpose of the meeting is to operationalise APNODE, a body whose mandate is to empower African members of parliament. The meeting will see APNODE adopt its constitution, elect an Executive Committee, and endorse a programme of action. Over 40 parliamentarians from 14 countries and six development partners are expected to attend the meeting. APNODE's core membership of parliamentarians is expected to grow to more than 20 African countries in the next few years. Founded in March 2014, APNODE focuses on enhancing capacity of parliamentarians to improve their oversight role, policy making, and national decision making by ensuring the processes are evidence-based.
Quota formula: data update (IMF)
The International Monetary and Financial Committee has called for agreement on a new quota formula as part of the 15th General Review of Quotas. The paper presents a limited set of illustrative simulations of possible reforms of the quota formula using the updated quota data. These simulations are purely illustrative and do not represent proposals.
SADC says it can end power shortages by 2019 (Mail and Guardian)
Deep-sea mining looms on horizon as UN body issues contracts (AP)
Nigeria: Ending rice importation (ThisDay)
West African bank to raise $500m to enhance regional integration (Shanghai Daily)
Shiro Armstrong: 'The race to a risky Trans-Pacific Partnership deal' (East Asia Forum)
Time for a new look at China’s SOEs (East Asia Forum)
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WTO members reach landmark $1.3 trillion IT trade deal
World Trade Organisation members representing major exporters of information technology products agreed on 24 July 2015 to eliminate tariffs on more than 200 such products.
In a meeting on Friday afternoon at the WTO headquarters in Geneva, a tentative accord reached by 54 WTO members on 18 July was confirmed as the basis for implementation work to begin. Ministers from the participating members will now work to conclude their implementation plans in time for the WTO’s 10th Ministerial Conference which will be held in Nairobi this December.
“Today’s agreement is a landmark,” said WTO Director-General Roberto Azevêdo. “Annual trade in these 201 products is valued at over $1.3 trillion per year, and accounts for approximately 7% of total global trade today. This is larger than global trade in automotive products – or trade in textiles, clothing, iron and steel combined.
“Eliminating tariffs on trade of this magnitude will have a huge impact. It will support lower prices – including in many other sectors that use IT products as inputs – it will create jobs and it will help to boost GDP growth around the world.
“This is the first major tariff-cutting deal at the WTO in 18 years. Coming so soon on the heels of the historic Bali Package which members agreed in 2013, it shows that the multilateral trading system can deliver. The WTO has now negotiated two deals in the space of two years which deliver real, economically significant results. I hope that this success will inspire members in other areas of our negotiations.”
The Director-General added that no other negotiating forum could include so many countries. He pointed out, as well, that all 161 WTO members will benefit from this WTO agreement, as they will all enjoy duty-free market access in the markets of those members who are eliminating tariffs on these products. The terms of the agreement will be formally circulated to the full membership at a meeting of the WTO General Council on 28 July.
Among the products covered in this agreement are new-generation semi-conductors, GPS navigation systems, medical products which include magnetic resonance imaging machines, machine tools for manufacturing printed circuits, telecommunications satellites and touch screens.
Under the terms of the agreement, the majority of tariffs will be eliminated on these products within three years, with reductions beginning in 2016. By the end of October 2015, each of the participating members will submit to the other participants a draft schedule which spells out how the terms of the agreement would be met. Participants will spend the coming months preparing and verifying these schedules. The objective is to conclude this technical work in time for the Nairobi Ministerial Conference in December.
The agreement also contains a commitment to work to tackle non-tariff barriers in the IT sector, and to keep the list of products covered under review to determine whether further expansion may be needed to reflect future technological developments.
The agreement this month is an expansion of the 1996 Information Technology Agreement which involves 81 members. In 2012, members recognized that technological innovation had advanced to such an extent that many new categories of IT products were not covered by the existing agreement. Negotiations began in 2012 to expand the coverage of the accord.
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Paris ministerial boosts UN climate talks, more national action plans released
Ministers and other high level officials from 46 countries made headway on the politically thorny issues that have stymied the UN negotiations to finalise the first-ever universal emissions-cutting deal during an informal meet in Paris, France held last week.
Consensus emerged at the gathering that there should be a regular, five-year review of the collective effort to curb climate-warming greenhouse gases (GHGs). National climate action plans will form the building blocks of new multilateral climate regime, set to replace the current Kyoto Protocol when it expires at the end of the decade, and geared towards keeping the world within a two degree Celsius rise from pre-industrial levels.
How to track progress on, and scale up ambition where needed, has been a sticking point between parties. These plans have been steadily released by countries throughout the year and a flurry of new contributions were released over the past week.
“This is a breakthrough,” Laurence Tubiana, France’s top climate negotiator commenting on the progress told reporters. “That was not obvious to get. There are still a lot of details to be worked out, but the idea of everyone accepting to be verified within a common framework is very significant,” she added.
The two-day session, held on 20-21 July, was framed as an “informal ministerial consultation” dedicated to preparing governments for the watershed UN Framework Convention on Climate Change (UNFCCC) meet to ink the deal in the French capital in December. All of the world’s top GHG emitters, apart from Russia, and the recognised negotiating blocs attended the meeting.
Ministers also made progress around the traditionally difficult principle of “common but differentiated responsibilities and respective capabilities” (CBDR), agreeing that governments will “self-differentiate” and judge their own capacity to contribute to the new UN climate deal, according to media sources.
The principle has proved a regular stumbling block over who should cut emissions beyond the end of the decade. In the multilateral climate regime to date, only developed nations have been mandated to cut emissions, in accordance with separate “Annexes” created when the UNFCCC was inked in 1992. The rise of new global economic powers, and corresponding escalating levels of emissions, has nevertheless created tensions around the distribution of mitigation efforts between countries.
Given that the principle will likely play a role in the new deal, according to an outcome document from last December’s climate meet held in Lima, Peru, negotiators must square the circle between differentiation and comprehensive participation.
Nonetheless, many in the international community have expressed optimism around the tone of the talks, and are optimistic about the safe passage of the deal by the end of the year. “I see far greater convergence on the broad outlines of the deal than we ever saw in the time preceding Copenhagen,” said Elliot Diringer, executive vice-president of US-based climate analysts C2ES, which recently finished organising a series of dialogues with senior climate officials on building a successful agreement.
From informal to formal
Some sources said that the meeting had been important in continuing to build up trust between policymakers and saw some discussion on a long term mitigation goal.
“The process needs a political nudge. Having ministers talking to each other, sitting around eye-to-eye, that helps to move things along,” said Tony de Brum, the Marshall Islands’ foreign minister.
Some delegates, nevertheless, drew attention to some outstanding challenges ahead around crafting the new climate governance regime and ultimately solving the CBDR structural challenge.
“On the way to the utmost target different tasks should be shared between developed and developing countries. Otherwise, someone may just wait and see, while others find it beyond their grasp,” said Xie Zhenhua, China’s special representative on climate change affairs, who also added that the overall meeting had been very productive.
Political progress in the talks was eyed after negotiators meeting in June in Bonn, Germany during the UNFCCC’s last formal session struggled to make headway on a 90 page-long negotiating text. That occasion had made clear that ministerial-level engagement would be important to help find solutions to the tougher issues on the table.
Negotiators and stakeholders are now eagerly awaiting the pending release of a new consolidated version of the negotiating text, or so-called “tool,” currently being drafted by the co-chairs of the UN climate talks. The informal document was proposed at the end of the June meet and will present countries with clearer options for various sections.
The streamlined text was released on Friday 24 July, and a second informal ministerial meet is likely to take place in Paris around 6-7 September, where discussions might focus on the financing of proposed policies. A UNFCCC negotiating session is scheduled from 31 August-4 September and another from 19-23 October.
The past week also saw the submission of two more national climate action plans – referred to in UN speak as “intended nationally determined contributions” – one by Japan and another from the Republic of Marshall Islands. The UNFCCC secretariat will release a report in November evaluating pledges received by October.
UPDATE: Kenya submits its Climate Action Plan ahead of 2015 Paris Agreement (23 July)
The latest submissions bring the total number of country pledges to 21, counting the 28-member states of the EU as one. According to a World Resources Institute (WRI) database dedicated to analysing the INDCs, these now cover over 56.3 percent of global emissions.
In early July, Singapore and New Zealand also joined ranks with countries the US, the EU, China, Mexico, Gabon, and Ethiopia, who have all submitted INDCs. However, a few big emitters, including Australia and India, have yet to come forward with their national plans.
Japan’s target criticised
Japan’s INDC promises a 26 percent drop in climate change driving emissions by 2030 from 2013 levels. This final plan was unchanged from a draft version released on 30 April. The cuts will cover energy, including those from industry, manufacturing, construction, transport, residential, agriculture, forestry, and fishing; fugitive emissions from fuels; and carbon dioxide transport and storage. The climate plan release came shortly after the government’s release of its long-term energy strategy out to 2030 published last Thursday by the Ministry of Economy, Trade and Industry.
Japan is the seventh largest emitter of greenhouse gases, accounting for 2.65 percent of global emissions, including those from land use, land use change, and forestry (LULUCF). Japan plans to increase the share of renewables to 22 to 24 percent of its energy supply by 2030. Japan is also looking to scale-up the share of nuclear in its power supply to 20-22 percent by 2030, a percentage that is still lower than before the devastating Fukushima nuclear accident in 2011. According to analysts, carbon emissions in Japan rose steadily after 2011 and peaked in 2013, since fossil fuels were used to replace zero-carbon nuclear energy, sparking a significant climate-development conundrum for the island nation.
By using 2013 as its baseline for emissions reductions in its INDC, some experts believe that Japan has backtracked on its 2009 target to reduce emissions 25 percent on 1990 levels. The post-2020 effort represents an equivalent of 18 percent emissions cuts below that baseline, finds monitoring group Climate Action Tracker.
While the Japanese government last week said that the INDC was comparable to the global effort, many environmentalist groups said the effort paled in comparison to the EU’s target of 40 percent reduction in emissions by 2030 on 1990 levels, and the US target of 26-18 percent reduction in emissions by 2025 on 2005 levels.
Some experts have also pointed out that Japan’s plans to build more than 50 coal fired power plants – the most polluting conventional fuel source – at home and abroad is at odds with the international pledge to reduce emissions.
“With this bare minimum target, Japan has not presented a credible plan to shift its economy from reliance on climate change-causing fossil fuels,” said Wael Hmaidan, executive director of Climate Action Network International, an organisation representing over 900 climate groups.
Missing the mark on markets, WTO compliance?
According to the INDC document, Japan is planning on reaching its emissions pledge by utilising carbon credits generated from its bilateral accounting system, also known as the Joint Crediting Mechanism (JCM). The JCM is intended to both cut GHG emissions and boost the export of clean technologies to developing countries.
In a move that surprised the international community, Japan created the JCM in 2010 to reduce its dependence on the carbon offset mechanism in the Kyoto protocol, referred to as the Clean Development Mechanism (CDM). The programme consists of bilateral agreements between Japan and 14 developing countries including Mongolia, Kenya, Cambodia, Mexico, and most recently Saudi Arabia and Chile.
Estimates from analysts show that Japan may have grossly overestimated the amount of emissions cuts that can be generated from the JCM. While Tokyo estimates that the mechanism will cut emissions by 50-100 million tonnes of CO2 equivalent between now and 2030, a recent article first published by Carbon Pulse, concludes that the four projects approved so far only have a combined capacity to reduce emissions by just 500 tonnes of carbon dioxide equivalent per year. Unless a vast number of new projects are approved, therefore, some experts say the JCM will not lead to the carbon reduction Japan needs to reach its target.
Some members of the international community are also concerned about the JCM’s compliance with WTO rules, with several experts suggesting the JCM may explicitly exclude the participation of foreign firms in the scheme. This could constitute as preferential treatment to Japanese companies, potential falling foul of WTO’s agreement on subsidies and countervailing measures. No formal complaint, however, has yet been made by another WTO member.
In addition, some analysts have questioned how the JCM will ensure environmental integrity and prevent double counting of emission cuts, as well as how the bilateral scheme will fit into the new agreement since the UN has not yet recognised the JCM as a “new market mechanism” that can generate offsets eligible to count against internationally binding commitments. Other commentators have also suggested that the scheme may not sufficiently take into account the actual technology needs of developing countries.
Pushing for more ambition
The Marshall Islands, meanwhile, aims to cut emissions 32 percent below 2010 levels by 2025 and provides a secondary indicative pledge to cut emissions 45 percent below 2010 levels by 2030. This is part of the government’s larger plan to reach net zero emissions by 2050, according to a statement from President Christopher J. Loeak’s office.
“With most of the big emitters’ targets on the table, everyone knows we are falling well short. Our message is simple: if one of the world’s smallest, poorest, and most geographically isolated countries can do it, so can you,” Loeak said on releasing the INDC.
As the first small island developing state to submit an INDC, facing many challenges ahead from the impacts of climate change, the contribution received a warm reception among stakeholders and environmental groups.
The INDC covers emissions from energy and waste, noting that emissions from other sectors are negligible. The nation said it does not plan to use market-based mechanisms to meet its targets. The INDC includes details on adaptation efforts and disaster risk management. Another section also details the international support the country will need to move to a low carbon future, particularly in the energy sector, given a current dependence on imported petroleum products.
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Remarks by President Obama at the Global Entrepreneurship Summit
Remarks by United States President Barack Obama at the 6th Global Entrepreneurship Summit in Nairobi, Kenya on 25 July 2015
Thank you so much, President Kenyatta, for your timely remarks, your warm welcome, and the great work that has gone into hosting this summit. It is wonderful to be back in Kenya. Niaje wasee! Hawayuni! I’m proud to be the first U.S. President to visit Kenya. And Obama, this is personal for me. There’s a reason why my name is Barack Hussein Obama. My father came from these parts, and I have family and relatives here. And in my visits over the years, walking the streets of Nairobi, I’ve come to know the warmth and the spirit of the Kenyan people.
Now, what President Kenyatta and I really want to have is a conversation with our panel. And we’ve got some outstanding young people here today who I think represent the promise of entrepreneurship not only in Africa but around the world. But I do want to make just a few quick points.
We are joined today by inspiring entrepreneurs from more than 120 countries and many from across Africa. And all of you embody a spirit that we need to take on some of the biggest challenges that we face in the world – the spirit of entrepreneurship, the idea that there are no limits to the human imagination; that ingenuity can overcome what is and create what needs to be.
And everywhere I go, across the United States and around the world, I hear from people, but especially young people, who are ready to start something of their own – to lift up people’s lives and shape their own destinies. And that’s entrepreneurship. Entrepreneurship creates new jobs and new businesses, new ways to deliver basic services, new ways of seeing the world – it’s the spark of prosperity. It helps citizens stand up for their rights and push back against corruption. Entrepreneurship offers a positive alternative to the ideologies of violence and division that can all too often fill the void when young people don’t see a future for themselves.
Entrepreneurship means ownership and self-determination, as opposed to simply being dependent on somebody else for your livelihood and your future. Entrepreneurship brings down barriers between communities and cultures and builds bridges that help us take on common challenges together. Because one thing that entrepreneurs understand is, is that you don’t have to look a certain way, or be of a certain faith, or have a certain last name in order to have a good idea.
The challenge is – as so many of you know – it’s very often hard to take those first steps. It’s hard to access capital. It’s hard sometimes to get the training and the skills to run a business as professionally as it needs to be in this competitive world. It’s hard to tap into the networks and mentors that can mean the difference between a venture taking off and one that falls flat.
And it’s even harder for women and young people and communities that have often been marginalized and denied access to opportunities. You run into old attitudes that say some people, because of where you come from or what you look like, don’t have what it takes to lead or create a business. And sometimes it’s subtle. You go into pitch an idea and maybe the response you get might not be as enthusiastic as if someone else pitched the exact same idea. Sometimes women or folks from communities that historically have not been viewed as entrepreneurial may not have the means of opening those doors just to get in front of the right person.
Of course, the best answer to that kind of thinking is the example that all of you are setting – your success. And that’s why I’ve made encouraging this spirit of entrepreneurship a key part of America’s engagement in the world. I launched the first of these summits in Washington five years ago. And since then, we’ve helped empower hundreds of thousands of entrepreneurs, giving them a boost to launch thousands of new businesses and initiatives. Here in Africa, our Young African Leaders Initiative is empowering tens of thousands of dynamic leaders not only in business, but also in government and civil society. Because one of the things that we have come to understand – and this is particularly relevant to Africa – is that in order to create successful entrepreneurs, the government also has a role in creating the transparency, and the rule of law, and the ease of doing business, and the anti-corruption agenda that creates a platform for people to succeed.
So this is our first Global Entrepreneurship Summit in sub-Saharan Africa. We wanted to come here. I wanted to be here because Africa is on the move. Africa is one of the fastest-growing regions of the world. People are being lifted out of poverty. Incomes are up. The middle class is growing. And young people like you are harnessing technology to change the way Africa is doing business, as President Kenyatta alluded to. And that creates incredible opportunities for Africans and for the world. It means more growth and trade that creates jobs in all our countries. It’s good for all of us. This continent needs to be a future hub of global growth, not just African growth.
And the country that’s hosting us today is setting an important example – Kenya is leading the way. Today, Kenya is the largest economy in East Africa. High-speed broadband and mobile connectivity are on the rise, unleashing the entrepreneurial spirit of even more Kenyans. Every day around the world, millions of people send and save money with M-Pesa – and it’s a great idea that started here in Kenya.
From Zimbabwe to Bangladesh, citizens work to keep elections safe, using the crowdsourcing platform Ushahidi – and that’s a great idea that started right here in Kenya. Here in Nairobi, startup incubators are nurturing new businesses every day – maybe some of yours – each with the potential to be the great next Kenyan innovation.
And the good news is that I’m not the only one who sees the promise of Africa. I’m joined on this trip by some leaders not just across my administration, but I’m also joined by 20 members of the United States Congress from both parties – because supporting a strong partnership with Africa is something that unites Americans. We’ve got some incredible entrepreneurs and business leaders who are well-established from the United States who are with us. They see the promise, as well. And they’re putting their money where their mouth is.
So today, we’re taking the next steps to partner with you. First, we’re offering entrepreneurs more startup capital. At last year’s Entrepreneurship Summit, we set a goal of generating $1 billion in new investment for emerging entrepreneurs around the world, with half the money going to support women and young people. A few months ago, I challenged governments, companies, organizations and individuals to help us reach this target. Today, I am proud to announce that not only did we make our goal, we surpassed it. We’ve secured more than $1 billion in new commitments from banks, foundations, philanthropists, all to support entrepreneurs like you.
Second, we’re connecting you with the world’s top business leaders and innovators. We hand-picked more than 200 seasoned investors and entrepreneurs and brought them to this summit. I’ve even brought a few of my presidential ambassadors for entrepreneurship. These are some of America’s leading innovators and entrepreneurs. So if you see them, don’t be shy. Pin them down. Get their advice. Pitch them your idea. That’s why they’re here. And don’t be discouraged if they say, I’m not sure that’s going to work, and they ask you tough questions. Because one of the things every one of these successful entrepreneurs will tell you is that along with incredible successes, they’ve had some failures as well, and they’ve learned from them, but they haven’t given up.
Number three, as I’ve said, we’re stepping it up to support women entrepreneurs. Women are powerhouse entrepreneurs. The research shows that when women entrepreneurs succeed, they drive economic growth and invest more back into their families and communities. We’ve already helped build a network of more than 1,600 women entrepreneurs across Africa. We’re launching three women’s entrepreneurial centers – one in Zambia, one opening later this year here in Nairobi and I’m proud to announce that the third center will be located in Mali. We’ve got some folks from Mali in the house.
And as part of that $1 billion that I mentioned earlier, the United States Overseas Private Investment Corporation is contributing $100 million to support Goldman Sachs’ 10,000 Women initiative, making more capital available to women-owned enterprises around the world. So, congratulations.
So as you leave here today, I want you all to know that I believe in you. I believe that you have the drive and the passion to change the world. You can unlock new solutions to the pressing global challenges that we face. I believe that. I believe that as you make these innovations, you’ll make life better for all of us. And I’m looking forward to being your partner in that process.
So with that, what I think we need to do is to hear from some of these young entrepreneurs themselves. They can tell us a little bit of what they’re doing – because I think they’re great examples of all the talent that is here today.
Thank you very much.
* * *
I think what’s also interesting is, as you listen to these three – and I think that I’m sure this is true of many of the entrepreneurs here as well – one of the advantages of this technological revolution that we’re going through is that it can be tailored and adapted to different countries, different environments, different circumstances, in some cases enabling countries to leapfrog over old technologies, to individualize what’s done for a particular market or a particular need.
And the kind of thing that Jahiel is talking about – the share economy concept – we’ve got the founder of Airbnb out here, and you can talk to him a little bit. He’s doing pretty good. But there’s a recognition that through these technological platforms, what might have previously required huge investments of capital, and as a consequence, big barriers to entry, now you can get a startup moving, and if it’s the right idea, it can travel with the speed of how fast you can text. I can’t text very fast, but – (laughter) – I notice Malia and Sasha, they – (laughter.)
And so I think that this makes a place like Africa, or Croatia, or other countries that historically may not have been viewed as right at the center of the global economy, suddenly they can compete on a level playing field. And if you have a good idea in Zagreb or in Abuja, or wherever, now you potentially have access to a global marketplace in ways that you haven’t had before.
What President Kenyatta said is absolutely correct, though, and that is for us to take full advantage of this we have to support programs like Judith’s so that our young people are being trained in this technology, that there are no barriers for girls to be trained in this technology. If half of your team is not playing, you’ve got a problem. And in too many countries, half of the team – our women and girls – are not participating enough in this.
So we’ve got to invest in human capital so that everyone has the opportunity to access this information and there’s got to be the framework for access to capital; reduce regulatory barriers; the ability to start up businesses effectively; making sure that governments are facilitating as opposed to being parasitic on entrepreneurial efforts – that’s our job.
And I think that the good news is, is that we’re seeing that recognition in more and more governments around the world. Not all of them always are practicing what they preach, but it’s a start when governments feel obliged through, for example, initiatives like the Open Government Partnership that we started through the United Nations – where they feel obliged to acknowledge that they’ve got to get these rule of law issues and accountability issues and human investment issues right – then that gives us a lever to start continually improving the environment for all of you and your operations.
And, last point I would make – and President Kenyatta alluded to this – I think it’s very important for the business leaders who are here, the established business leaders, to understand that this is still a neglected market, and accessing capital for entrepreneurs here is still too hard. And we can help – U.S. government policy can help – but some of this is exposure and people having a vision of what’s possible.
When I was here in Nairobi 10 years ago, it looked very different than it does today. The incredible progress that’s been made imagine what could happen if more and more of our global business leaders and global capital paid a visit and actually had a conversation, as opposed to just being blinded by some of the stereotypes that are so often promoted. This thing could move even faster. And that’s part of the reason why this summit is so important.
So, I’m proud of all of you. I’m proud of these three entrepreneurs who are here. They represent all the talent that’s in this room. Go out there and start something. We’re excited about it. We expect great things out of you.
Thank you very much.
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Fact sheet: Deepening the U.S.-Africa trade relationship
President Obama has prioritized promoting U.S. trade with and investment in Africa, building Africa’s trade capacity, and extending preferential access to the U.S. market for African products.
U.S. non-petroleum imports from Africa increased by 46 percent and U.S. goods exports to Africa increased by 59 percent since 2009, evidence of growing trade ties between the United States and Africa.
Doing Business in Africa while Building African Capacity to Trade
The Doing Business in Africa (DBIA) Campaign is an un-precedented whole-of-government approach to strengthening the U.S. commercial relationship with Africa, a diverse region that offers substantial trade and investment opportunities across national and regional markets. Africa is home to nine of the twenty fastest-growing economies in the world, and provides substantial opportunities for U.S. companies.
At the 2014 U.S.-Africa Business Forum (USABF) and U.S.-Africa Leaders Summit, U.S. Government departments and agencies made $7 billion in commitments on the continent, many of which are nearing completion. Following the success of the USABF, the President has announced he will attend the next U.S.-Africa Business Forum in 2016, which will take place in the United States.
The President’s Advisory Council on Doing Business in Africa (PAC-DBIA), announced at the USABF, was formed in November 2014. The Council is working closely with the U.S. Government to recommend ways the government can strengthen the U.S.-Africa trade and investment relationship.
U.S. Department of Commerce: To facilitate U.S. business activity in Africa, the Department of Commerce:
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Doubled its presence in sub-Saharan Africa over the past year, by opening new offices in Angola, Tanzania, Ethiopia, and Mozambique, while expanding its operations in Ghana, and re-establishing a position at the African Development Bank.
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Supported 16 private sector deals in Africa worth approximately $7 billion, with $4.1 billion in U.S. export content, since the USABF.
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Will lead several members of the PAC-DBIA on a fact-finding trip to Africa to engage with partners and stakeholders to discuss how U.S. Government programs and policies can better support economic engagement between Africa and the United States.
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Will launch a multi-stop Institutional Investor Roadshow – with an inaugural stop on the margins of the UN General Assembly Session – in September 2015 to provide a platform for U.S. institutional investors and African heads of state to discuss best practices to reduce governance risk, strengthen capital markets and increase long-term investment flows to mobilize U.S. private sector capital and introduce U.S. exporters and U.S. financial institutions to specific export and investment opportunities in African markets.
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Will launch, in coordination with the Department of State, a whole-of-government approach to support U.S. companies pursuing infrastructure projects in Africa. To pilot this mechanism, the U.S. and Kenya governments have signed a Memorandum of Understanding (MOU) to promote U.S. commercial participation and investment in Kenya’s infrastructure sector.
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Will launch in October 2015 the Cold Chain Assessment Initiative with the Global Cold Chain Alliance to develop a modern cold chain in Kenya and plans to replicate it across the region.
Millennium Challenge Corporation: MCC is well on its way to reaching the$2 billion DBIA funding commitment announced during last year’s USABF. MCC is launching a bankable Public-Private Partnership (P3) Platform that will:
1) Raise an estimated $750 million from the private sector through more than $50 million in MCC grants by delivering bankable P3 transactions over the next five years;
2) Help partner countries create enabling environments through policy and institutional reform and prepare P3 deals through an open, competitive selection process; and
3) Make available a comprehensive and coordinated package of tools and resources from U.S. Government partners to offer financing, technical assistance, and technology transfer to prepare bankable public-private partnerships.
Overseas Private Investment Corporation (OPIC): OPIC committed $1 billion in financing and insurance at the USABF and is on track to meet that commitment by the end of 2015. OPIC will expand its DBIA commitment to another $1 billion for financing and insurance through 2018. In addition, the OPIC CEO will lead a post-Ebola investor trip to West Africa in early 2016 to bring together investors in renewable energy and healthcare who are looking to expand operations in West Africa. OPIC will also open two new offices in sub-Saharan Africa by the end of 2016.
U.S. Trade and Development Agency (USTDA): USTDA is working with African governments to improve procurement practices for infrastructure projects under its Global Procurement Initiative (GPI), to help level the playing field for U.S. companies competing on public tenders and helping countries get better value for their procurement dollars. USTDA will launch a GPI program specifically for Ethiopia. Additionally, to connect African buyers with U.S. manufacturers and service providers, USTDA will host four reverse trade missions to the United States covering: U.S. cold chain practices for agriculture; airport security and modernization; port security and modernization; and healthcare. USTDA will also fund a feasibility study to assist the development of a new multi-commodity bulk port in Senegal and a training for delegates from 16 countries across sub-Saharan Africa on using modernized meteorological technology to increase weather service capabilities and fast track the implementation of early warning systems, climate information, and meteorological data platforms. In conjunction with this trip, USTDA will resume its work in Kenya, including supporting Presidential initiatives such as Power Africa, Trade Africa and other priority infrastructure projects in Kenya.
U.S. Department of Agriculture (USDA): USDA’s Commodity Credit Corporation (CCC) committed $1 billion in financing guarantees for exports of U.S. agricultural commodities to Africa at the USABF; $975 million has been made available, and CCC will make immediately available an additional $100 million of its original commitment. In addition, CCC will commit to an additional $1 billion in financing guarantees available through 2017.
U.S. Department of Transportation: DOT will host up to five workshops in 2016 and direct $1 million toward strengthening civil aviation safety through the Safe Skies for Africa program. DOT will continue to implement Tomorrow’s Transportation Leaders initiative through a series of workshops and training courses on intermodal transportation planning, regional integration and logistics, safety oversight, and facilitating border-crossings.
U.S. Department of State: The U.S. Department of State is organizing a medical technologies trade mission to Nigeria and Cameroon, in cooperation with the U.S. Department of Commerce, planned for in November 2015. The mission will be led by a senior State Department official.
Strengthening Africa’s Business Climate and Trade Capacity
The Office of the U.S. Trade Representative led U.S. Government efforts to supporting African governments as they strengthen their business environments and capacity for regional and global trade, increasing the attractiveness of Africa as a supplier of goods and services and a destination for foreign investment, as well as increasing demand for Made-in-America goods and services in Africa
Extending the African Growth and Opportunity Act (AGOA) for 10 Years: AGOA, first signed into law in 2000, is the cornerstone of the U.S.-Africa trade relationship. The recent 10-year extension of AGOA – the longest in the program’s history – sends a strong signal that we are serious about expanding our bilateral trade relationship with Africa, including creating new customers for U.S. goods and services. The extension provides certainty for African producers and U.S. buyers about access to the U.S. market and creates a stable environment that encourages increased investment in sub-Saharan Africa. The legislation also lays groundwork for more reciprocal trade relationships post-AGOA, on which the U.S. Trade Representative will begin a dialogue at the August 2015 AGOA Forum in Gabon.
Deepening and Expanding Trade Africa Partnerships: Under the Trade Africa Initiative launched by President Obama in 2013, the United States and the East African Community (EAC) have made significant progress in advancing best trade practices in the EAC member countries. At a February 2015 Ministerial meeting, the United States and EAC signed an agreement on implementation of World Trade Organization (WTO) rules and deepening cooperation and assistance in three key areas: trade facilitation, sanitary and phytosanitary measures, and technical barriers to trade. We also held the inaugural U.S.-EAC Commercial Dialogue.
Since the Leaders Summit, the U.S. Agency for International Development’s Trade Hubs have facilitated nearly $220 million in African exports and $75 million in local investment under Trade Africa, while working with local governments and regional economic communities to meet WTO commitments, establish the framework for national single window and trade information portals, and modernize customs procedures. Over the next five years the Trade and Investment Hubs in East and West Africa are expected to facilitate over $200 million in new investments and foster the creation of 37,000 jobs.
The United States plans to work with Congress to expand the Trade Africa Initiative to include new partners, including Cote d’Ivoire, Ghana, Mozambique, Senegal, and Zambia to identify activities that will improve compliance with WTO rules on trade facilitation, sanitary and phytosanitary measures, and technical barriers to trade; foster an improved business climate; and, address capacity issues that have constrained trade. The U.S. Government is also working to support the Economic Community of West African States (ECOWAS) to improve regional trade.
Advancing Ratification and Implementation of the WTO Trade Facilitation Agreement: Under the Trade Africa initiative, the U.S. Government is encouraging African governments to take advantage of the World Trade Organization’s Trade Facilitation Agreement (TFA), which will simplify customs and other border control procedures and reduce the cost and time of doing business across borders. TFA implementation would help African businesses participate more fully in global value chains, smooth the movement of goods across African borders, and make African goods more competitive in global markets. This would have broad development benefits as well as promote regional integration, investment, and exports. The Organization for Economic Co-operation and Development estimates that implementing the TFA could reduce worldwide trade costs by as much as 17.5 percent, with the greatest benefits accruing to African and other developing countries.
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Africa urged to push for new global trade rules
African countries have been urged to demand new global trade rules during the forthcoming World Trade Organization Ministerial Conference to be held in Nairobi in December to ensure that the continent benefits from global trade.
United Nations Conference on Trade and Development Secretary General Mukhisa Kituyi says African countries should push for new rules that empower the continent to gain from the global trade, since the current ones favor developed nations that enjoy ample infrastructure coupled with immense resources.
The November 2001 Declaration of the Fourth Ministerial Conference in Doha, Qatar, provides the mandate for negotiations on a range of subjects, and other work including issues concerning implementation of the present trade agreements.
Kituyi asserted that the current trade rules popularly known as Trade-Related Aspects of Intellectual Property Rights under the Doha Declaration do not reflect adequately the problems of Africa, thus remain irrelevant to the needs of the continent.
He says Africa’s regional trade blocs need to strengthen their bargaining power on the global platforms to maximize on trade opportunities.
Foreign Affairs Cabinet Secretary Amina Mohammed says Africa would join the negotiations as a team to improve its stake in the global trade.
She says African leaders will capitalize on the Lagos Plan of Action, where regional entities were formed as the first building blocks towards a continental Free Trade Area.
Nearly 7000 delegates are expected to attend the Ministerial Conference, now in its 10th edition, and the first ever to be held on African soil.
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UNCTAD opens first regional office in Africa to ‘Make Trade Work’ for the continent
To directly deliver on-the-spot authoritative advice on trade and development issues to policymakers and all stakeholders in Africa, UNCTAD has opened a regional office in Addis Ababa, Ethiopia.
The Regional Office for Africa will be headed by Ms. Joy Kategekwa, a Ugandan former official with the World Trade Organization. The inauguration of the office was marked by an official ceremony at the Hilton Addis Ababa hotel on 22 July.
The first UNCTAD office of its kind, the Africa branch will, in the words of UNCTAD Secretary-General Mukhisa Kituyi, help “make trade work for Africa”.
Trade among African countries is very low relative to the continent’s total trade. Over the past decade, the share of intra-African trade in Africa’s total trade was about 11 per cent, as compared to 21 per cent for Latin America and the Caribbean, 50 per cent for developing Asia and 70 per cent for Europe.
“Africa is at a crossroads in its trade agenda,” Dr. Kituyi said. “Never has the political momentum and support for deeper trade integration been higher on the continent.”
“Having UNCTAD on the ground provides Africa the opportunity to use UNCTAD’s extensive technical and analytical resources,” Dr. Kituyi added. By providing the “missing link” between recommendations and actions “the Regional Office for Africa will play a leading role in coordinating the delivery of UNCTAD’s advisory services in support of implementation of the post-2015 agenda for African countries”.
The office will help African governments to accelerate regional economic integration in Africa, Dr. Kituyi said. This will contribute to bringing prosperity to Africans by embedding their companies into regional value chains and making their economies more productive.
“UNCTAD has the necessary tool kit to support Africa in these processes,” Dr. Kituyi said.
Speaking at the inauguration, African Union Trade Commissioner Fatima Haram Acyl, said: “We would like UNCTAD to support us on Africa’s regional integration agenda, most especially the continental free trade area (CFTA). We are already receiving significant support, but we need more.”
African Union Economic Affairs Commissioner Anthony Mothae Maruping, also present, added: “It was a good decision to come closer to Africa where the action on development actually is. The UNCTAD mandate is very much needed on the continent and we will benefit from bringing global experience to Africa.”
Ms. Kategekwa, the newly appointed head of the office, said that it had “already played a lead role in launching UNCTAD’s Economic Development in Africa Report and will be working to follow up with member States in taking its recommendations forward”.
In addition, she said, the office “will be central to delivering support to the African Union Commission and its member States in the process of negotiating the African Union CFTA”.
UNCTAD – the United Nations Conference on Trade and Development – was formed in 1964 to help poor countries adopt policies that would integrate them into the world economy and boost prosperity. UNCTAD is based at the United Nations Office at Geneva, Switzerland, and has a representative office at the United Nations in New York. It works at the behest of 194 member States and employs roughly 500 people.
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Time running out for states to sign TFTA
Member states of the tripartite free trade area have until December to ratify the TFTA agreement before it comes into force in January.
The trade agreement, establishing a single market for 26 African countries, will only come into force once ratification is attained by two thirds of the membership.
A total of 16 countries, including all the East African partner states, have signed the TFTA agreement since its launch in Egypt last month.
“Swaziland was the latest country to sign the agreement and the only Southern African Customs Union (SACU) member to sign,” said Peter Kiguta, EAC Director-General in charge of Customs and Trade, adding that TFTA partner states have to present the signed agreement to their respective parliaments or Cabinets for ratification to meet the deadline.
“Following the launch, the deal will only go into force upon ratification of the text by two-thirds of the TFTA member states,” he added. “The signing of the agreement in Egypt was a sign of commitment by the individual countries but the implementation will only commence once the agreement has been ratified.”
It is expected that once the Tripartite FTA is implemented, it will form the building block for the continent-wide free trade agreement, known as the Continental FTA. However, member states are yet to agree on two of the 43 Articles – one on the rules of origin and the other on dispute settlement.
The two articles require that tripartite member states not impose quotas on imports or exports on their TFTA partners. They are also required to eliminate non-tariff barriers.
The dispute settlement article covers trade in services such as intellectual property rights and competition policy, as well as trade development and competitiveness among member states.
Southern African countries are yet to agree on the general exceptions on trade in gold, silver, precious stones and strategic metals.
According to Mr Kiguta, negotiations have commenced on outstanding issues of rules of origin, trade remedies and dispute settlement as part of the post-signature implementation plan agreed upon by the member states in the agreement framework adopted in Egypt.
“The challenge is on harmonising differential rules of origin as the EAC and Comesa regimes in this area are significantly different from the ones used by SADC,” said Mark Ogot, senior assistant director at Kenya’s Ministry of East African Affairs, Commerce and Tourism.
TFTA experts have suggested that where rules are common (including wholly originating), 35 per cent ex-works costs (distribution and logistics) should be retained as an interim option. If enacted, such a move would mean that products on which these value-added criteria of 35 per cent ex-works cost apply could gain duty-free regional market access.
“The negotiations are on product- specific rules of origin,” noted Mr Ogot. “The final outcome is hard to predict.”
Although the provisions of the tripartite agreement favour a single value-added rule as in the EAC and Comesa regional agreements, negotiations are now moving from a percentage-based approach towards a product-specific approach, which will involve defining specific rules for numerous product categories (those covered by divergent rules of origin).
The other challenge is the restrictions on movement of people, minerals and fragile sectors that stand in the way of three trade blocs.
Angola, Democratic Republic of Congo (DRC), Eritrea, Ethiopia, Tanzania and Botswana have made little progress towards opening up their borders to allow free movement of people for fear that foreigners will displace locals in the job market.
They are also concerned that their local industries will be overtaken by foreign imports.
In the TFTA agreement, members agreed to retain restrictions on the entry of the sensitive goods into their respective countries until 2017 to allow nascent industries to adjust to the competition expected from cheaper products.
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tralac’s Daily News selection: 24 July 2015
The selection: Friday, 24 July
Changes in foreign investment in South Africa: a ‘Friends’ perspective (tralac)
This paper provides an update on South Africa’s foreign investment position through to and including the December 2012 year with respect to the old, new and good friends of the EU and USA; the BRICs of Brazil, Russia, India and China; and Africa, respectively. While this paper examines the ‘big picture’ only it does raise some interesting questions as to what is driving some of these recent developments. Especially important for the South African economy is the investment relationship with China, as this is the overwhelming development in the last few years. Similarly, but in a less dramatic manner, the steadily increasing South African investments in the African continent suggest than a more detailed analysis of these investments is likely to reveal some interesting stories at the firm level. [The author: Ron Sandrey]
AGOA: remarks by President Obama at White House reception celebrating AGOA (The White House)
The ties to Africa here in the United States obviously are deep; they are long; they're complicated. There have been times where there have been misunderstandings, and there have been times where there have been suspicions. But when you look at every survey, it turns out that the people of Africa love the United States and what it stands for. Perhaps unmatched on any continent. And what's also interesting about the surveys is, is that when they look to see who are the happiest and most optimistic of people, what's amazing is, is that Africans always rank high, despite poverty, despite conflict. There is a strength and a resilience there.
Where Barack Obama treads US business plans to follow (Financial Times)
Jas Bedi, chairman of the African Cotton and Textile Industries Federation, says Agoa’s renewal, which is longer than previous four-year extensions, marks a huge chance for Africa. “This is the first time we’ve got a 10-year window to the finish line: you wouldn’t justify large investments in the value chain because of the [previous] four-year window,” he said. “We can see a lot of investment coming in the region now as a result.”
Kenya to ink lucrative deals with US ahead of summit (Business Daily)
Foreign Affairs secretary Amina Mohamed said on Thursday most of the deals would target infrastructure and health sectors as well as cooperation in taxation and emigration. The agreements, to be signed Friday afternoon, will signal a deepening of economic ties between the Kenya and the US ahead of President Barack Obama’s arrival Friday evening.
Global Entrepreneurship Summit should help Kenya fix its economy’s crucial ‘missing middle’ (Business Daily)
ACP-EU relations after 2020 (CTA)
This report is the result of a series of Expert Round Tables held in March 2015, the first phase of a two-stage consultation process launched by the European Union on ACP-EU relations after 2020. One hundred and three experts from EU academia, think-tanks, the private sector, Civil Society organisations, EU Institutions and EU Member States were consulted through a process of Round Table discussions. Participants attempted to identify essential elements of a good partnership, with mutual trust featuring high on the list. A future agreement should take into account factors such as i) the changes that have taken place in global geo-politics, ii) new emerging challenges and regional dynamics, iii) the heterogeneity of the partners, iv) the Cotonou acquis, v) shared universal values, vi) EU specific and mutual ACP-EU interests and, finally, vii) the flexibility needed to deal with changing circumstances.
Egypt's trade deficit grows 52.7% in April: CAPMAS (Ahram)
Egypt's trade balance deficit reached LE24.6 billion in April of 2015, representing a 52.7 percent increase compared to LE16.11 billion in the same month last year, the state-run statistical body CAPMAS reported on Tuesday. State exports valued LE14 billion in April, declining from LE17.26 billion in April 2014, due to a drop in the price of certain goods such as crude oil, petroleum products and primary form plastics. Meanwhile, imports' value rose by 15.67 percent, jumping to LE38.7 billion, from LE33.37 billion during the same month last year.
Uganda: Government unveils export strategy (Daily Monitor)
Presenting the National Export Development Strategy for the financial year 2015/16-2019/20 early this week, Mr Emmanuel Mutahunga, the principal commercial officer at the Ministry of Trade said production of traditional crops has stagnated with some falling; something which he said raises serious concerns if it is not addressed. In his presentation, total exports for last year dropped to $2.6b from $2.8b the year before—2013, resulting into continued widening of Uganda’s trade imbalance, which has had serious impact on the country’s economic fundamentals, including weakening the Shilling and inflationary pressures. [Background]
Uganda: Car importers peg prices to dollar amid falling Shilling (Daily Monitor)
Uganda: Nakumatt to buy Shoprite (Daily Monitor)
Supermarket giant Nakumatt Holdings has finalised plans to buy two stores owned by South African retail chain Shoprite. In an interview in Nairobi on Tuesday, Mr Thiagarajan Ramamurthy, the Nakumatt Holdings head of strategy and operations, told Kenyan-based Business Daily, a sister newspaper to Daily Monitor, that the “retail chain will sign the deal in less than two weeks”. The buyout will mark the exit of the South African retail giant from the East African market having sold its three Tanzanian outlets to Nakumatt for a reported Shs124b.
Zambia to issue $2 billion government Eurobond (The Post)
Zambia plans to issue a 10 year Eurobond which could reach as high as $2 billion which will be used to fund its budget deficit which has recently increased due to a fall in the global copper market. This is considered to be one of Africa’s largest international bonds. Zambia's budget deficit is expected to grow to as much as $2.64 billion by the end of 201, considerably more than initial estimates made earlier this year. This will be Zambia’s third Eurobond in as many years. The continent’s second largest copper producer entered into the international capital markets with a debut $750 million bond in 2012 and a $1 billion bond last year.
Nairobi meeting to propose new ideas on Africa’s agriculture and food security (UNECA)
The ECA, AU, ICRAF and other technical partners across Africa are meeting in Nairobi on 22-24 July 2015 on farming systems reforms in Africa. The meeting is expected to produce a comprehensive, up-to-date forward-looking strategy on African farming systems for policy and decision makers, research organisations, development actors and investors. The expert group will base their discussions on ECA’s strategic report: ‘Rethinking Africa’s strategic agricultural commodities production systems in the new global context’ and on the book “Farming Systems and Food Security in Africa” to be published by Earthscan/Routledge later in 2015. Drawing from the ECA report and expert insights, the meeting will make recommendations and guidelines on how to turn emerging African production and food systems into a zero loss, zero waste, clean, closed loop economy towards 2063.
Biodiversity and climate change: integrating REDD+ into BioTrade strategies (UNCTAD)
A Great Green Wall for Southern Africa? (ICRAF)
Rockefeller to support innovative ideas on post-harvest loss reduction (Daily Nation)
Zambia: Cashew Infrastructure Development Project - SESA summary (AfDB)
The project is aimed at reviving the cashew industry by focusing on infrastructure development for the cashew value chain including cashew production, processing and marketing. The Project will aim at contributing to GoZ’s efforts of increasing crop diversification, productivity, processing and improving market linkages. CIDP will mainly contribute to core operational priority of infrastructure development and will ensure proper governance and accountability in its implementation. The Zambia cashew hub, in Western Province, is estimated to cover an area of about 1.3 million hectares with the potential to produce approximately 130,000 tonnes of raw cashew nuts per annum.
Mauritius becomes 15 COMESA State to sign CAADP Compact (COMESA)
Mauritius has become the 15th COMESA member country to sign its national Comprehensive Africa Agriculture Development Programme Compact. The signing of a CAADP Compact symbolises a commitment to investment in consensually agreed key priority areas, and an overall vision for agricultural transformation. In Mauritius the signing sets the parameters for long-term partnership in the agricultural sector and also specifies key commitments on the part of government and development partners. In November last year, COMESA signed the Regional CAADP Compact with the cooperating partners involved in various aspects of its implementation at a ceremony held in Kinshasa, D R Congo. The regional compact contained a list of regional priority projects that cut across more than one COMESA Member State.
Seychelles: IMF Article IV Consultation report
The outlook for 2015 is positive, though substantial risks remain. In 2015, the authorities expect real GDP growth to accelerate modestly to 3.5 percent. Inflation is likely to be around 5 percent, with the effect of the depreciation of the exchange rate being partially offset by the decline in oil prices. The current account deficit is expected to contract to 15 percent of GDP in 2015, again largely reflecting the falling cost of petroleum imports. The US dollar value of tourism earnings has declined modestly, reflecting the pricing of most hotel tariffs in the weakening euro. Given the considerable reliance on tourism from Europe, Seychelles remains vulnerable to the faltering recovery in Europe. [Download]
Zimbabwe to hold investment conference in London (NewsDay)
Zimbabwe will hold an investment conference in London as it steps up efforts to lure foreign investors, a diplomat has said. Speaking at the launch of the Public Private Partnership (PPPs) yesterday British ambassador to Zimbabwe Catriona Laing said the country has received several delegations as there was a lot of interest in the country. Laing said an investment conference will be held in London at a date yet to be advised by the Office of the President and Cabinet.
Zimbabwe: Mobile transactions surpass $2bn in Jan-May (The Herald)
Mozambique’s GDP grew by 6% in 1st quarter (MacauHub)
Speaking on Wednesday at a question and answer session in the Mozambican parliament, the Assembly of the Republic, Prime Minister Carlos Agostinho do Rosario said the preliminary figures indicated annual GDP growth of 6% in the first quarter of this year “which opens good prospects for meeting the target of 7.5% growth for 2015”. By June, the average 12 monthly inflation rate was 2.4%, he added, well below the target of an average inflation rate of 5.1% in the government's plans.
WTO: Deal could cut tariffs on $1 trillion in tech trade (Bloomberg)
Trade negotiators tentatively agreed on Saturday to eliminate tariffs on an array of technology products valued at $1 trillion worth of global commerce. The breakthrough toward the World Trade Organization’s Information Technology Agreement took place at an ambassadors’ meeting at the European Union embassy in Geneva. The U.S. Trade Representative’s office hailed a “major breakthrough” in what would be the first significant tariff-cutting deal at the WTO in 18 years.
ECOSOC approves texts on tax matters, least developed countries (UN)
The representative of Benin, speaking on behalf of the Group of Least Developed Countries, expressed the good will and resolve of the Group to move forward. However, he underscored the many challenges they faced and emphasized that such challenges should be taken into account in all intergovernmental processes. Development partners must honour their commitments. “We need the support of all,” he stressed.
On tax matters, the Council adopted, without a vote, a draft decision orally presented by the representative of South Africa on the “Committee of Experts on International Cooperation in Tax Matters”. By that text, the Council took note of the report of the Committee on its tenth session as well as of the report of the Secretary-General on further strengthening the work of the Committee of Experts on International Cooperation in Tax Matters.
Special report: 'Africa - the billions that got away' (TrustAfrica, Mail and Guardian Africa)
Many, including ourselves at TrustAfrica, have always been cautious about the over dramatised narrative of “Africa Rising” especially as it mostly uses Gross Domestic Product as a measure of growth. Other Human Development indicators such as Gross National Income, access to affordable health care, education, and decent jobs are rarely considered in the ongoing optimism surrounding Africa. [Download]
This week in the news
Catch up on tralac’s daily news selections for the past week:
The selection: Thursday, 23 July 2015
The selection: Wednesday, 22 July 2015
The selection: Tuesday, 21 July 2015
The selection: Monday, 20 July 2015
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This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to over 300 recipients across Africa and internationally, serving in the AU, RECS, national government trade departments and research and development agencies. Your feedback is most welcome. Any suggestions that our recipients might have of items for inclusion are most welcome. Richard Humphries (Email: This email address is being protected from spambots. You need JavaScript enabled to view it.; Twitter: @richardhumphri1)
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Concluding Coordination, Management Session, Economic and Social Council approves texts on tax matters, least developed countries
The Economic and Social Council concluded its coordination and management session this afternoon with the adoption of a draft decision on international cooperation in tax matters and a draft resolution on the Programme of Action for the Least Developed Countries for the Decade 2011-2020.
The Council adopted, without a vote, a draft resolution on the “Programme of Action for the Least Developed Countries for the Decade 2011-2020”, as orally revised.
By its terms, the Council took note of the report of the Secretary-General on the implementation of the Programme of Action for the Least Developed Countries for the Decade 2011-2020. It noted with great concern the decline in the share of official development assistance (ODA) to the least developed countries, and welcomed the commitment of the development partners to reverse that decline.
It recalled the commitment, contained in the Istanbul Programme of Action, that donor countries should review their ODA commitments in 2015 and consider further enhancing the resources for the least developed countries.
The Council further called upon the least developed countries, their development partners, the United Nations system and all other actors to further intensify their efforts to fully and effectively implement, in a coordinated, coherent and expeditious manner, the commitments made in the Istanbul Programme of Action in its eight priority areas – productive capacity; agriculture, food security and rural development; trade; commodities; human and social development; multiple crises and other emerging challenges; mobilizing financial resources for development and capacity-building; and good governance at all levels.
Further by the text, the Council welcomed the decision of the General Assembly to hold the comprehensive high-level mid-term review of the implementation of the Istanbul Programme of Action in Antalya, Turkey, for a period of three days in June 2016 and requested the Secretary-General to submit to the Council a progress report on the implementation of the Programme of Action at its substantive session of 2016.
Taking the floor following the adoption of that text, the representative of Benin, speaking on behalf of the Group of Least Developed Countries, expressed the good will and resolve of the Group to move forward. However, he underscored the many challenges they faced and emphasized that such challenges should be taken into account in all intergovernmental processes. Development partners must honour their commitments. “We need the support of all,” he stressed.
On tax matters, the Council adopted, without a vote, a draft decision orally presented by the representative of South Africa on the “Committee of Experts on International Cooperation in Tax Matters”. By that text, the Council took note of the report of the Committee on its tenth session as well as of the report of the Secretary-General on further strengthening the work of the Committee of Experts on International Cooperation in Tax Matters.
That decision had replaced a draft resolution that had been withdrawn this afternoon by its sponsor, South Africa. Taking the floor prior to the adoption, the representative of South Africa, speaking on behalf of the “Group of 77” developing countries and China, said that while there was increasing recognition of the importance of taxation in development, a global intergovernmental forum for those matters was still lacking. The creation of an intergovernmental subsidiary body of the Council would go a long way to strengthen international cooperation in tax matters.
In addition, he said, the Committee of Experts on International Cooperation in Tax Matters should be further strengthened and its work better integrated into that of the Council. At the Third International Conference on Financing for Development held in Addis Ababa last week, high-level speakers had stressed the need for further cooperation on tax matters in order to finance development, he said. He urged all countries and other actors interested in contributing to the work of the Committee to do so on a voluntary basis.
The representative of the European Union took the floor to support the adoption of the decision. The working methods leading to the drafting of the decision, however, had been less than optimal, with very little time for delegations to consider the text, he said.
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ACP-EU relations after 2020: EU’s final report
This report is the result of a series of Expert Round Tables held in March 2015, the first phase of a two-stage consultation process launched by the European Union (EU) on ACP-EU relations after 2020.
Participants attempted to identify essential elements of a good partnership, with mutual trust featuring high on the list. A future agreement should take into account factors such as i) the changes that have taken place in global geo-politics, ii) new emerging challenges and regional dynamics, iii) the heterogeneity of the partners, iv) the Cotonou acquis, v) shared universal values, vi) EU specific and mutual ACP-EU interests and, finally, vii) the flexibility needed to deal with changing circumstances.
Background
The Cotonou Partnership Agreement (CPA), between the African, Caribbean and Pacific (ACP) Group of States and the EU, which will expire in February 2020, was signed in 2000. However, the Partnership dates back to as early as the 1950s with various instruments and agreements, as manifested in the Treaty of Rome, the Yaoundé Declarations and the early European Development Funds (EDFs). According to Article 95 of the CPA, negotiations between the Parties “in order to examine what provisions shall subsequently govern their relations” are mandated to start “eighteen months before the end of the total period of the Agreement” in August 2018.
The Round Table process provided initial assessments and opinions from a total of 103 participants – experts from academia, think-tanks, the private sector, Civil Society organisations, EU Institutions and EU Member States – based on their experience with the ACP-EU partnership and their thematic knowledge.
The consultation was led by a team of eight consultants, i.e. one team leader and seven cluster leaders, under the guidance of the European Commission’s Directorate General for International Cooperation and Development (DG DEVCO) and the European External Action Service (EEAS). It was organised in the form of seven thematic Round Tables each considering clusters identified by the EU as key to a revised partnership:
i) What kind of partnership do we want?
ii) The future framework for international cooperation and development policy;
iii) Means of implementation;
iv) Stakeholders and institutions;
v) Regional integration and trade;
vi) Global challenges;
vii) Demographic developments.
The number and composition of experts was carefully balanced in order to ensure the broadest possible coverage of views from European stakeholders and a diversity of profiles to stimulate an open debate on post-Cotonou issues.
Six of the Round Tables were co-hosted by European Union Member States and took place in in The Hague, Bonn, Paris, Luxembourg, London and Riga, while (the first) one was held in Brussels. A concluding Round Table which discussed the outcome of the whole process with Commission services and the EEAS was organised in May, also in Brussels.
This report presents the key findings of the process together with recommendations for questions suggested for a subsequent phase of broader public consultations. It presents an overview of the discussions preceded by a description of cross-cutting issues which emerged in several or all Round Tables. The report seeks to offer a faithful reflection of the deliberations amongst participants of each Round Table. Opinions reported reflect those of the experts (without personal attributions), not those of the institution they belong to.
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Africa: The billions that got away
Special report examining the Illicit outflows of money from the continent and the need for a global response to stem it.
Africa loses approximately US$50 billion annually through Illicit Financial Flows (IFFs). The AU/ECA’s High Level Panel on Illicit Financial Flows report and other studies argue that Africa lost over US$1 trillion through IFFs in the last 50 years – an amount similar to Official Development Assistance in the same period.
Many, including ourselves at TrustAfrica, have always been cautious about the over dramatised narrative of “Africa Rising” especially as it mostly uses Gross Domestic Product (GDP) as a measure of growth. Other Human Development indicators such as Gross National Income (GNI), access to affordable health care, education, and decent jobs are rarely considered in the ongoing optimism surrounding Africa.
Whilst GDP growth has indeed been above an average of 5% for most of Africa, we rarely get insights into how African economies are structured and also a discussion on who benefits from this growth. One salient fact about the growth is that it comes largely from the global commodity super cycle and to some extent the boom in the telecommunications industry. Enterprises that produce and trade in the commodities are mostly large multinationals domiciled outside of Africa. They enjoy tax holidays, revenue repatriation arrangements and relaxed labour laws. Revenue repatriation agreements allow companies to remit their revenues to the head office, but this practice is NOT part of IFF.
Beyond the benefits cited above, these large companies are the drivers of illicit financial flows. According to the AU/ECA report, the most common practices include trade mispricing, under-invoicing of exports, exaggeration of import values, and general tax avoidance schemes. IFF processes are very complex in nature and some of the reports in this handbook attempt to expand upon them – except to restate that they are costing Africa about US$50 billion per year – approximately 68% of Kenya’s GDP.
Human development, inclusive of access to quality health provision, education, jobs and decent standards of living remains unattainable for many Africans. The benefits of the current growth cycle have been highly unequal and limited mostly to higher income earners.
More and more Africans perish in the Mediterranean every year trying to enter Europe in search of greener pastures. We also know about US$50 billion is needed annually to fund infrastructural projects amid the steady decline in Official Development Assistance (ODA).
The AU’s Agenda 2063 underlines improved domestic resource mobilisation as a key pillar for Africa’s sustainable and inclusive development. It is in this light that we at TrustAfrica, alongside our friends and partners within civil society, are calling for a new development compact underpinned by transparency, accountability and equity.
We aim at collecting a million signatures against an opaque global economic system that accommodates IFFs. It is morally reprehensible for economic actors to continue engaging in these harmful practices at the expense of Africa’s future. We need sufficient public energy and an outcry for an immediate end to these practices. Our governments and regional processes should play their part in fast tracking mechanisms and laws for compliance with the new thinking.
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IMF Executive Board 2015 Article IV Consultation with Seychelles
On June 17, 2015, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Seychelles.
Macroeconomic outcomes remain solid, and most of the external pressures experienced in 2014 have abated. Weakness in the main exports combined with strong domestic demand in 2014 led to depreciation pressures on the exchange rate. Beginning in late 2014, tighter monetary policy, a recovery in tourism, and falling global fuel prices, together with the effects of the depreciation on imports, helped to contain the external pressures. The combination of spending discipline and buoyant fiscal revenues – driven by strong imports – resulted in a primary surplus of over 4½ percent of GDP in 2014, exceeding the target. However, disappointing tourism arrivals ensured that growth remained subdued in 2014. Financial sector soundness indicators remain in the comfortable range; the Central Bank of Seychelles had to take management control of a small off-shore bank in October 2014 after it lost its correspondent relationship, but there should be no significant repercussions on Seychelles’ economy.
With a continuing recovery in tourism and the effect of lower fuel prices, projected growth for 2015 is slightly higher than earlier envisaged at 3½ percent; the exchange rate has recovered modestly against the dollar. The depreciation began to pass through to inflation, reaching 4.0 percent in May 2015 (year-on-year). The large current account deficit in 2014 is expected to contract sharply in 2015, helped by monetary policy tightening and lower fuel prices. In addition to a decline in FDI-related imports, import demand will be restrained by the depreciation, continued tight monetary policy, and a tight public sector wage round.
Statement by Ms. Plater, Executive Director for Seychelles and Mr. South, Advisor to Executive Director for Seychelles
After experiencing a debt crisis in 2008-09, the very small archipelago state of Seychelles has pursued ambitious and wide-ranging reforms aimed at stabilizing the economy and reorienting fiscal and monetary policies to lift and entrench growth. The authorities have made significant progress in building a resilient and more diversified economy under successive programs supported by the Extended Fund Facility. Macroeconomic stability has been restored, growth has returned, inflation has moderated, the exchange rate has stabilized, public debt has declined sharply, and net international reserves have been steadily accumulated. These outcomes have been underpinned by the floating of the exchange rate, and tighter monetary and fiscal policies. However, the authorities are keenly aware that continued efforts are needed. As a very small, highly open economy that is heavily reliant on tourism and imports, Seychelles remains particularly vulnerable to external shocks. The authorities continue to focus on strengthening macroeconomic stability by further reducing public debt from high levels, accumulating additional international reserves, and pursuing deep structural reforms to promote inclusive growth.
The authorities remain firmly committed to the program and request the completion of the second review. The authorities successfully met all but one of their quantitative program targets for end-December 2014. Importantly, public debt remains on track to fall below 50 percent of GDP by 2018, which has been a target firmly embedded in the authorities’ reform program since 2008. The targets for the fiscal primary surplus and higher net international reserves were surpassed comfortably last year, while the reserve money ceiling was exceeded by a very small margin, which was later corrected. The authorities request a waiver for this minor and temporary breach. The authorities have made considerable progress on the structural benchmarks, which remain broadly on track albeit with some delays.
Recent economic developments and outlook
With stronger fundamentals now in place, the Seychellois economy proved better equipped to deal with external challenges in 2014. Real GDP grew by 3.3 percent in 2014, while the decline in oil prices contributed to stable inflation outcomes. External pressures heightened through 2014, with weaknesses in key exports. The economy adjusted successfully, benefitting from the reforms of recent years. The exchange rate depreciated by 16 percent in the three months to October 2014 before stabilizing and appreciating by around 6 percent since the start of this year. The balance of payments pressures abated towards the end of 2014 as a result of tightened monetary policy, the decline in oil prices and in response to the exchange rate depreciation. The current account deficit of 21 percent of GDP was lower than projected at the time of the first review, largely due to lower oil prices. It continues to be financed by strong FDI inflows. For 2014, the primary fiscal surplus exceeded program targets, as indirect tax collections reflected strong import growth and domestic demand. Income tax and business tax collections fell modestly below initial targets. Non-tax revenues were lower than targeted, as a result of lower dividends from SOEs. Primary current expenditures were in line with program targets, while capital expenditure modestly exceeded the target. While expenditure on wages and salaries increased following the pay increase to civil servants granted at the beginning of 2014, such expenditure remains relatively low compared to other small island states and the authorities have maintained appropriate wage restraint more recently.
The outlook for 2015 is positive, though substantial risks remain. In 2015, the authorities expect real GDP growth to accelerate modestly to 3.5 percent. Inflation is likely to be around 5 percent, with the effect of the depreciation of the exchange rate being partially offset by the decline in oil prices. The current account deficit is expected to contract to 15 percent of GDP in 2015, again largely reflecting the falling cost of petroleum imports. The US dollar value of tourism earnings has declined modestly, reflecting the pricing of most hotel tariffs in the weakening euro. Given the considerable reliance on tourism from Europe, Seychelles remains vulnerable to the faltering recovery in Europe.
Fiscal and structural policies
Seychelles is continuing to make good progress in restoring fiscal discipline, reducing debt, and strengthening public financial management. The 2015 budget aims to achieve a primary surplus of SR 720 million, equivalent to 3.8 percent of projected GDP. Prudent debt policy aims to reduce public debt to 63.7 percent of GDP in 2015, and is on track to achieve the target of 50 percent of GDP by 2018. Considerable progress has been made in implementing public financial management reforms, including the adoption of a Medium-Term Fiscal Framework that has anchored Seychelles’ fiscal strategy and the medium-term national development strategy. However, the authorities are conscious that more remains to be done. A new PFM action plan for 2015-18 is geared towards improvement in capital project cash and asset management as well as a further enhanced medium-term budget framework.
The introduction of a VAT and flat-rate personal income tax has yielded sound revenue collections and the authorities are now focused on improving business tax collections. Tax collections are relatively high compared with other countries in the region as well as other small island states. Reforms implemented between 2008 and 2012 improved the efficiency of the tax system by broadening the base and reducing rates, while maintaining the overall tax burden. The authorities continue to modernize tax administration and are now focusing on improving business tax compliance, including by undertaking risk-based audits of 60 large businesses, and improving the revenue administration’s capacity to analyze transfer pricing arrangements. They are also focusing on simplifying payment procedures and improving the collection of arrears.
The authorities are focused on ensuring the quality of spending and that ongoing investments in health, education and social programs support growth prospects and social outcomes. Seychelles has achieved sound outcomes for its citizens in education, health, poverty eradication, and the environment. Underpinning these outcomes has been a policy of free access to healthcare and education. The authorities are taking steps to improve the training of functional skills, as a means to address the skills shortage and mismatches.
The authorities are continuing to strengthen the accountability, monitoring and control of SOEs to improve the efficiency of SOEs and reduce fiscal risks. As a microstate of many small islands, the lack of competition and need for scale in some sectors of the economy call for a larger role for government. Accordingly, SOEs exist in Seychelles to deliver a range of essential services in electricity, water, roads, seaports, fuel supply, transport and aviation. The authorities are mindful of the need for accountability, monitoring and control so that SOEs do not present undue risks to public finances. In particular, the authorities are placing more emphasis on applying best practices to SOEs through management and governance audits so as to further enhance transparency and efficiency in the delivery of public services. The operational performance of the state-owned petroleum (SEYPEC) and utilities (PUC) companies improved in 2014. However, Air Seychelles recorded large operational losses, which were offset by contributions previously committed by the government of Seychelles and by the airline’s other private shareholder. Air Seychelles has announced the introduction of a direct route to Paris from 1 July 2015, codeshared with Air France, aimed at boosting arrival numbers from this key market. The government of Seychelles has worked with Air Seychelles to establish a clear plan to return the airline to profitability, including milestones by which progress will be assessed.
The authorities also recognize that the private sector is the engine of growth and are committed to ensuring that the operation of SOEs does not obstruct the participation of private sector in competitive markets. The authorities agree on the need for SOEs to focus on core mandates in order to minimize risks to the public finances and to allow for the development of the private sector. Furthermore, recognizing the need for a vibrant and competitive private sector, the authorities will continue to promote competition in key sectors such as fisheries and port services. The authorities are pursuing a PPP model for the participation of private investors in the expansion of the port of Victoria, and are working to appropriately balance the share of risks and incentives for the private involvement. More generally, the authorities are working with the African Development Bank and other partners to develop a PPP policy, which would ensure transparency and accountability in the risks to the public balance sheet.
Seychelles is on track with its strategy of reducing public debt to sustainable levels. The strong fiscal performance and forecast of GDP growth in the medium term mean that public debt is expected to fall below 50 percent of GDP in 2018. The authorities aim to place borrowings on favorable terms and gradually extend maturities of the debt portfolio. With debt service set to rise sharply in the near term as grace periods come to an end, one of the key debt management goals is to smooth out the debt service profile and shift borrowings on to local currency wherever possible. It is with these objectives in mind that the authorities have agreed on a debt reorganization to smooth and reduce debt service obligations while providing a stream of resources to support marine conservation. Under this agreement, Paris Club creditors and South Africa will receive the immediate repayment of a share of claims, at a moderate discount. The government of Seychelles benefits from an extended period over which it will make repayments, which are partially converted into domestic currency. A portion of the repayments will be set aside for marine conservation activities through a global environmental NGO.
Seychelles continues to deepen its integration with the global economy. Seychelles joined the WTO in April 2015, an important step given the economy is reliant on open access to trade in goods and services. The authorities also ratified the Convention on Mutual Administrative Assistance in Tax Matters, bringing Seychelles into line with existing international standards on the exchange of tax information. Seychelles has also joined the group of early adopters of the new global standard to automatically exchange tax information. Seychelles is strongly committed to transparency through the adoption of internationally accepted best practices in statistics, and has recently graduated from the GDDS to subscribe to the SDDS. As an EITI Candidate country, Seychelles will publish its first EITI Report by February 2016.
Mauritius signs CAADP Compact to transform agriculture for inclusive economic growth
Mauritius has become the 15th member country in the Common Market for Eastern and Southern Africa (COMESA) to sign its national Comprehensive Africa Agriculture Development Programme (CAADP) Compact.
“CAADP responds to the aspirations of Africa by placing agriculture as the engine of social and economic growth,” said Mr. Mahen Kumar Seerutun, Mauritian Minister of Agro-Industry and Food Security.
Speaking on behalf of the NEPAD Agency and the African Union Commission, Dr. Janet Edeme, Head of Rural Economy and Agriculture Division, expressed gratitude to Mauritius for building consensus among partners on necessary solutions to meet the challenges in agricultural development. Dr. Edeme also remarked that it is important that Africa commit its own resources towards the continent’s development.
The signing of a CAADP Compact symbolises a commitment to investment in consensually agreed key priority areas, and an overall vision for agricultural transformation. According to CAADP principles, these agricultural priorities are arrived at through an inclusive national roundtable process. The priorities are by nature, results-based and reflect the views of all stakeholders in the country’s agriculture sector.
The signing ceremony of the CAADP Compact was led by the Minister of Agro-Industry and Food Security, Mahen Kumar Seerutun, Minister of Foreign Affairs, Regional Integration and International Trade, Etienne Sinatambou and COMESA’s Assistant Secretary-General for Programmes, Dr. Kipyego Cheluget.
“Africa boasts huge resources and economic potential, and therefore the role of both public and private sector in agriculture cannot be overemphasized,” Dr. Cheluget said. He added, “The Mauritius CAADP Compact will give impetus to other countries that have not already done so to sign their compacts and implement their National Agriculture Investment plan.”
The national CAADP Compact was also signed by representatives of the African Union Commission, the NEPAD Agency, Small Farmers Welfare Fund, the Ministry of Gender Equality, Child Development and Family Welfare, Ministry of Ocean Economy, the Mauritius Chamber of Commerce and the Food and Agriculture Organisation (FAO).
Minister of Foreign Affairs, Regional Integration and International Trade, Mr Etienne Sinatambou stressed that the CAADP process is in line with the Mauritian development priorities, with particular emphasis on biotechnology.
Although continental in scope, the CAADP agenda is an integral part of national efforts to promote agricultural sector growth and economic transformation. In the case of Mauritius, the focus of the CAADP process is to strengthen and add value to the strategy for agricultural transformation under the ongoing Economic Development Strategy of the country as outlined in the Government Programme (2015-19).
The ultimate goal of the CAADP process in Mauritius is to answer that call for the agricultural sector, by:
(i) Helping define a coherent long term framework to guide the planning and implementation of agricultural programmes; and
(ii) Identifying strategic options and sources of economic empowerment and inclusive growth for the agricultural sector
The CAADP Compact in Mauritius sets the parameters for long-term partnership in the agricultural sector. It also specifies key commitments on the part of government and development partners. Furthermore, the Compact clarifies expectations with respect to the agribusiness and farming communities in order to ensure successful implementation of the Government Programme 2015-2019.
Therefore the goals of CAADP are very much in harmony with Mauritius’ goals of creating a modern and sustainable agricultural sector that will contribute to economic growth and poverty reduction in the country.
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Deal could cut tariffs on $1 trillion in tech trade
Trade negotiators tentatively agreed on Saturday to eliminate tariffs on an array of technology products valued at $1 trillion worth of global commerce.
The breakthrough toward the World Trade Organization’s Information Technology Agreement took place at an ambassadors’ meeting at the European Union embassy in Geneva.
“Very optimistic that we’ll have a final successful deal by the end of next week,” Roberto Azevêdo, director-general of the WTO, said on Twitter. “We have the basis for an agreement.”
The U.S. Trade Representative’s office hailed a “major breakthrough” in what would be the first significant tariff-cutting deal at the WTO in 18 years.
“This will open overseas markets for some of America’s most competitive companies and workers,” USTR Michael Froman said in an e-mailed statement. “We are confident that all parties will now give formal approval to their participation in what would be the first tariff-elimination deal at the WTO in 18 years.”
In talks that started on July 14, members took on the question of various tariffs, notably on LCD screens, which were contested by Taiwan and China, and an EU request concerning car radios. South Korean negotiators withdrew their opposition to an extended agreement, and members agreed to consider a draft list of covered products.
Tariffs on semiconductors, magnetic resonance imaging machines, global positioning system devices, printer ink cartridges, video game consoles and other products would be cut to zero under the deal, according to the USTR office.
‘Final Approval’
The expanded product list will now undergo consideration from trade ministers at their various capitals.
“We have the basis for an understanding,” Azevêdo told Bloomberg BNA in Geneva after the meeting. “The list is out, members are going to consult their capitals, and we will know by Friday whether we have final approval on the list of products and the declaration itself.”
The product list could pave the way for a finalized deal that would contribute as much as $190 billion to the global gross domestic product and support 60,000 U.S. jobs.
Technology manufacturers like Intel Corp., Samsung Electronics Co., Sandisk Corp. and Texas Instruments Inc. stand to benefit from the elimination of tariffs on some 250 products.
The 80 WTO countries that participate in the ITA talks account for about 97 percent of global trade in IT products.
Staging Schedules
The ITA requires participants to eliminate import tariffs on technology products on a most-favored-nation basis, meaning that any duty-free terms are applied to all WTO members.
In September, ITA negotiators will start talks on schedules of concessions for tariff reductions, also known as staging. That allows countries to gradually phase in the tariff reductions for certain products deemed too sensitive for the ITA’s various signatories.
Negotiators will also hold technical negotiations with the goal of completing the agreement by the WTO Ministerial Conference scheduled for Dec. 15-18 in Nairobi, Kenya.
U.S. technology industry officials are hopeful the deal could enter into force as soon as July 2016.