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Northern Corridor experts meet ahead of presidential summit
Senior officials and experts from member states of the East African Community (EAC), yesterday, met in Kampala ahead of the 10th Northern Corridor Integration Projects (NCIP) Summit.
The summit, which is expected to be attended by at least four heads of state on Saturday, is aimed at assessing the implementation status of projects launched under the NCIP framework.
It is expected to draw the Presidents of Kenya, Rwanda, South Sudan and the host Uganda.
The NCIP meeting will have three other sessions; the private sectors’ meeting (today), the ministerial session (tomorrow), and the Heads of State Summit (on Saturday).
“We have discussed a number of issues, including the fact that airports will now also have branded tourism information centres contrary to the earlier position where the branded centres were only to be stationed at border entry points,” said Monique Mukaruliza, Rwanda’s national coordinator for the NCIP.
The tourism information centres will market, among other projects, the East Africa Single Tourist Visa, which makes the Northern Corridor partner states a single tourist destination.
With the visa, tourists have many choices of getting value for their money by seeing more in just one trip across the three countries.
The summit will also have a special focus on how to actively involve the private sector in the integration projects.
Opportunities for the private sector
Robert Nkusi Ford, the second vice chair of the Private Sector Foundation (PSF), said the private sector has already identified opportunities in the public-private partnership arrangement that include investment in the ICT sector.
“Partner states are now looking at co-funding an awareness campaign up to the tune of $140,000 on the use of national identity cards, voters cards and students ID,” he said.
Officials emphasised the need for members of the private sector to be involved by buying shares in the Northern Corridor projects so they can benefit from them.
Alex Mugire, the Rwanda Revenue Authority head of compliance and enforcement, said Rwanda was in the process of procuring electronic car tracking system.
“Once we have this system estimated at $3.9 million, we will be connected to the common platform with Uganda and Kenya. It will mean that there will be one seal – and not like the case it is today of tracking cargo in bits,” he said.
The Northern Corridor brings together countries that are mainly served by Mombasa port in Kenya.
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New study: Illicit outflows correlate to higher poverty and inequality, lower human development
Illicit financial flows (IFFs), stemming from crime, corruption, and tax evasion, have an outsized impact on the world’s poorest countries, according to a new study released on 3 June 2015 by Global Financial Integrity (GFI), a Washington, DC-based research and advisory organization. Titled “Illicit Financial Flows and Development Indices: 2008-2012,” the report also finds strong correlations between higher illicit outflows and higher levels of poverty and economic inequality.
“Illicit financial flows have an outsized impact on the poorest countries in the world,” said Tom Cardamone, GFI’s managing director. “The value of this study is that it goes beyond ‘the big number’ of cumulative global illicit outflows and focuses instead on the impact of IFFs in the poorest of places. A lot of attention gets paid to the massive amount of illicit money flowing out of China, Russia, and other major emerging markets. However, on a relative basis, when you compare illicit financial flows to major development indices like GDP, FDI, and total trade, it becomes extremely clear that illicit outflows take a particularly devastating toll on the world’s poorest economies.”
Authored by GFI Junior Economist Joseph Spanjers and GFI Economics Fellow Håkon Frede Foss, the report compares illicit outflows from the world’s poorest economies to some traditional indicators of development – including GDP, total trade, official development assistance plus foreign direct investment, public expenditures on education and health services, and total tax revenue, among others – for the years 2008-2012, the most recent five-year period for which data are currently available.
“For nearly one-quarter of the 82 countries that we analyzed, the ratio of illicit financial outflows to GDP is ten percent or greater,” commented Mr. Spanjers, the principal author of the report. “For example, IFFs to GDP amount to a staggering 21.7 percent in Honduras, 18.1 percent in Zambia, and 11.2 percent in Ethiopia. It would not be overstating the point to note that, if any other economic factor had a double-digit ratio to GDP, it would be front-page news. Unfortunately, this is often not the case when illicit flows are concerned.”
The authors additionally find a disturbing correlation between illicit financial flows and 1) higher levels of poverty, 2) higher levels of economic inequality, 3) and lower levels of human development, as measured by the United Nations’ annual Human Development Index.
“Higher illicit outflows aggravate poverty, exacerbate income inequality, and erode human development in the world’s poorest countries,” added Mr. Spanjers.
Additional correlations are found between higher relative levels of illicit financial flows and trade openness, tariff rates, and the efficiency of customs.
Policy Recommendations
The report lays out several policy recommendations, and puts a particular emphasis on the outcome of next month’s Third Financing for Development (FfD) Conference in Addis Ababa.
“Concerted action is needed by the international community to assist all developing nations in curtailing the phenomenon of ‘trade misinvoicing’ (i.e. trade fraud) which moves up to 80 percent of all illicit funds offshore,” said Mr. Cardamone, GFI’s managing director, who is leading the organization’s work on the FfD process. “As world leaders continue to negotiate the outcome of next month’s Financing for Development Conference, curtailing trade misinvoicing must be a focus given its link to domestic resource mobilization.”
“We look forward to a robust agreement that: 1) mandates the IMF to regularly measure trade misinvoicing levels from all developing countries; 2) commits the world community to halve trade misinvoicing in all developing countries by 2030; and 3) requires donor countries to provide financing for trade pricing databases and training in customs departments so poor nations can stop misinvoiced goods before they leave the ports. It’s simply impossible to produce a credible FfD Outcome Document that doesn’t commit to measuring and reducing trade misinvoicing by an explicit percentage,” added Mr. Cardamone.
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tralac’s Daily News selection: 3 June 2015
The selection: Wednesday, 3 June
The WEF Africa conference started this morning in Cape Town: some links
Africa faces mounting risks to keep rising growth record going (Bloomberg)
Sim Tshabalala: 'How finance can accelerate steady inclusive growth in Africa' (Business Report)
Book launch: 'Africans investing in Africa' - edited by Terence McNamee, Mark Pearson, Wiebe Boer (Brenthurst Foundation)
SA gets chance to shine at WEF (Business Report)
Leaders discuss a single market for Africa, need for peace and stability (AfDB)
Ghanaian President John Dramani Mahama while in agreement with his counterparts on the need to have peace and stability as a means of enhancing integration efforts, also suggested how it could be done: through participatory integration that allows every African to play a role. “That way, we can avoid or reduce the risk of people that might want to burn the place down because they feel they’re not being included,” he cautioned.
Mahama also challenged AfDB to take the centre-stage in the campaign for a single market for Africa arguing that the Bank has managed to transform itself into a respected institution of the continent and it was ready to take on such serious responsibilities. “It’s now time for AfDB to now transform the continent that gave birth to it, through funding Africa’s integration agenda” Mahama challenged.
Zambia - DR Congo discuss the Simplified Trade Regime (COMESA)
The three day meeting hosted at the COMESA Secretariat is expected to come up with a unified, negotiated list of products that can be traded by the two neighbouring countries. This will boost trading by bringing cross-border trade into formal mainstream trade. Products usually traded are maize, pulses, groundnuts, fish, electronic products, plastics, cosmetics, other hardware parts, clothing and textile materials and shoes among others.
Among the issues to be addressed in both the short and long term include the products in the STR Common List and the value threshold for high value products between the two countries. Others are excessive taxes and fees and the complexities of other regulatory procedures which are still considered important such as sanitary and phyto-sanitary measures. This bilateral meeting between the DRC and Zambia is the first in a long time. If successful, the STR will be launched at the DRC/Zambia borders of Kasumbalesa, Mokambo and Sakanya.
Eliminating counterfeits: laws alone not enough (The New Times)
How will an ordinary mwananchi owning a building in Bungoma, Rwakiruuri, Nyagatare, Ombokolo, Buyenzi, Nyakanyansi, or any other rural township in East Africa know whether his tenant businessman is selling a fake BIC pen or a genuine one? Legislation alone will not be enough.
As legislation progresses, the East African Business Council must take the lead into the following measures:
The ultimate break-through will be a clearly defined EAC industrialisation path, defined on the following key tenets:
EAC budget dwindles third year in a row as sponsors exit (Daily Nation)
East African Community budget has for the third time in a row dropped, with a significant reduction in the number of development partners. Last week the regional legislative assembly debated and approved a Sh10.734 billion budget for the 2015/16 financial year, down from Sh12.049 billion approved last year. The assembly approved Sh12.785 billion in 2013.
This report presents the findings of the independent evaluation of the quality at entry of country and regional integration strategies. The purpose of this evaluation is two-fold: (1) assess the quality at entry of Country Strategy Papers (CSPs) and Regional Integration Strategy Papers (RISPs) and whether it has improved since the last independent quality at entry exercise (QAE1) undertaken in 2008 - 2009 (retrospective); and (2) to suggest potential improvements to the Bank’s design process for its country/regional strategies in light of the Bank’s Ten-year strategy (prospective).
ADF innovation policy Lab: EOI for chief advisor (AfDB)
The consultant will be a Chief Advisor responsible for the overall operation and management of “Shaping the Future of the African Development Fund” and creation of an ADF Policy Innovation Lab project. The Project is funded by Bill & Melinda Gates Foundation Trust Fund and will bring together the best creative, cross sector and cross-disciplinary minds to brainstorm on the subject of innovation for development finance in Africa.
Where are the keys to Africa’s industrialization? (AfDB)
Hellen Hai, CEO of the Made in Africa initiative, shared her experience of having started a shoe factory in Ethiopia which has grown to become one of Africa’s model stories and is spreading to more African countries such as Rwanda. “The Chinese model will require that you jump on the tiger and decide how to ride it when you are already on its back,” she said, her message indirectly urging African governments to launch the campaign for industrialization.
Ethiopia’s compelling rise - lessons for Africa (Brenthurst Foundation)
The Ethiopian government has driven growth through a range of infrastructural investments – rail and air transport, hydro-electricity and a national fibre optic cable scheme, to name some of the biggest – supported by sound policy. In contrast to its neighbours, Ethiopia remains politically stable, with a functioning and efficient government which has curbed corruption and reduced security threats in the country. Ethiopia’s state-centric approach to development has exposed a number of shortcomings, however. Its (in)ability to create or attract a productive private sector able to translate major infrastructural investments into the basis for a dynamic modern economy could yet blunt its future prospects. [The authors: Christopher Clapham, Greg Mills]
Nigeria’s foreign direct investment drops 49% q/q in Q1 2015 (BusinessDay)
The latest capital importation report released by National Bureau of Statistics has shown that Nigeria’s foreign direct investment declined by 48.7% in Q1 of 2015 in relation to the preceding quarter (Q4) 2014. The NBS report states that FDI showed the lowest year-on-year decline in inflows, at $96.09 million growing at -14.77%, while on quarter on quarter basis, the decline was larger at $374.25 million or -48.68%. [Download]
IMF adviser Njoroge picked as Kenya’s next central bank head (Bloomberg)
“The appointing authority saw it fit to get someone with international exposure,” Robert Bunyi, managing director of Nairobi-based investment company Mavuno Capital, said by phone on Wednesday. “As Kenya’s financial system integrates more with the global financial system, and we issue more debt instruments, our currency will come to the fore.” Njoroge’s appointment comes as the central bank grapples with accelerating inflation and a weakening currency.
AGOA: 'What came first: the chicken or the leg?' (The Trade Beat)
On the sidelines of this week’s OECD meetings in Paris, South Africa’s Minister of Trade and Industry Rob Davies and US Trade Representative Mike Froman will try and overcome the protracted dispute between the two countries on chicken exports. It is an example of a blind spot in global trade regulation: structural oversupply markets. These are markets that are in a state of permanent disequilibrium, in which supply always outstrips demand. [The author: Christopher Wood]
SA citrus exports to EU increase (Business Report)
South Africa’s citrus exports to the European Union (EU) increased by 9% in value last year despite having been hit by the troublesome citrus black spot fungus (CBS), said EU ambassador to South Africa Roeland van de Geer. More than 34% of South Africa’s citrus is exported to the EU and 40% of all citrus consumed in the EU in winter was imported from South Africa. Van de Geer strongly dismissed some suggestions from the South African side that the restrictions on CBS-infected citrus were a disguised trade protection measure.
African Natural Resources Centre seeks comments on its 2015-2020 strategy (AfDB)
The newly established African Natural Resources Center has launched an online consultation to seek comments from all stakeholders on its draft strategy for 2015-2020. This online consultation is consolidated by a series of regional and global consultations. Participation to the online consultation is possible through the following address: http://j.mp/ANRC_Consultation
Strengthening climate and disaster resilience in Sub-Saharan Africa (World Bank)
Most meteorological and hydrological service providers in Sub-Saharan Africa are unable to meet users’ current needs for weather and climate information. Also, corresponding infrastructure is inadequate. A recent WMO survey showed that 54% of the surface and 71% of the upper air weather stations in the region did not report data. In addition, there is limited and often fragmented funding from development partners. The need for a larger, sustainable system architecture inspired the WMO, African Development Bank, and World Bank Group to join forces. The initiative will have a flexible framework to coordinate and leverage financing, ranging between US$550-US$600 million, from various sources of development and climate finance. The initial phase will focus on 15 countries and four regional centres.
Transport in Africa: the African Development Bank’s intervention and results for the last decade (AfDB)
The goal of this evaluation is to inform future policy, strategic, and operational directions for the Bank’s assistance in the transport sector by: (i) identifying emerging trends in the sector; (ii) assessing how the Bank has responded to these trends; (iii) taking stock of the results of the Bank’s assistance; and (iv) drawing lessons for future work. In informing the renewal of the Transport Sector Policy, this evaluation sought to answer four main evaluation questions:
Capacity building for SADC parliamentarians: value for money in social sectors (AfDB)
Strict scanning rule leaves tonnes of export tea stuck in Mombasa (Daily Nation)
Burundi tax revenue declines as unrest persists (Africa Review)
Political unrest slows Burundi cargo uptake at Mombasa port (The Star)
Silencing the Guns: strengthening governance to prevent, manage, and resolve conflicts in Africa (AU/IPI)
The 30m-strong Africa diaspora likely sends $160bn home every year: Where does it go? (Mail and Guardian Africa)
More Nigerian professionals in Europe than in Nigeria, says EU (BusinessDay)
China factories scrabble for growth in May, export demand shrinks (LiveMint)
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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SA gets chance to shine at WEF
The World Economic Forum (WEF) on Africa kicks off in Cape Town today, giving South Africa an opportunity to make its investment case to an audience of global and African business leaders as the country looks for ways to boost growth, alleviate poverty and cut unemployment.
WEF Africa represents a crucial platform for engagement across a range of topics over the next three days – from governance, to innovation, to entrepreneurship, to infrastructure, to the empowerment of women, to youth and to the environment.
This week’s gathering will be attended by more than 1 000 high-level participants from business, politics, civil society, academia and the media, making it the largest ever held in Africa by the WEF.
The meeting also marks the 25th anniversary of WEF meetings in Africa.
Last year, WEF Africa was held in Abuja, Nigeria, under the theme “Forging Inclusive Growth, Creating Jobs”, marking the first time that the meeting was held in west Africa.
President Jacob Zuma is leading the South African contingent, and he will use the opportunity of hosting WEF Africa to promote South Africa’s appeal as an investment destination within the context of an emergent Africa.
WEF figures show that Africa is home to six of the 10 fastest growing economies in the past 10 years.
Zuma is accompanied by a dozen ministers, including Nhlanhla Nene, the finance minister; Ebrahim Patel, the minister of economic development; Ngoako Ramatlhodi, the minister of mineral resources; Tina Joemat-Pettersson, the minister of energy; Derek Hanekom, the minister of tourism; Maite Nkoana-Mashabane, the minister of international relations and co-operation; and Mzwandile Masina, the deputy minister of trade and industry.
The ministers are scheduled to participate in key sessions during the meeting.
“The country is open for business and offers a sound investment destination for savvy investors,” South African cabinet spokeswoman, Phumla Williams writes in Business Report today.
“South Africa is the most diversified economy on the continent and plays an integral role in Africa’s advancement,” Williams added.
Helped by its status as Africa’s most advanced economy, South Africa has been able to claim a growing share of investment coming into Africa.
Legacy
Even so, the legacy of apartheid remains all too commonplace – with recent figures showing that unemployment in the first three months of this year jumped to 26.4 percent from 24.3 percent.
Moreover, the current power crisis has not helped South Africa’s image here and abroad even as the government scrambles to plug holes in the country’s power generating capacity to sustain growth.
Analysts worry that the power constraints will make it impossible for South Africa to realise gross domestic product growth north of 2 percent in the short to medium term.
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Multinational companies cheat Africa out of billions of dollars
Africa was cheated out of US$11 billion in 2010 through just one of the tricks used by multinational companies to reduce tax bills, according to new Oxfam report, ‘Africa: Rising for the few,’ released on 2 June 2015.
This is equivalent to six times the amount needed to plug the healthcare funding gap in Ebola affected countries of Sierra Leone, Liberia, Guinea and Guinea Bissau.
Oxfam’s findings come as African political and business leaders get set to attend the 25th World Economic Forum Africa in South Africa. The main theme of the meeting will be how to secure Africa’s economic rise and deliver sustainable development. Reforming global tax rules so that Africa can claim the money it is due – and which is needed to tackle extreme poverty and inequality – is critical if the continent is to continue its economic rise.
Oxfam is calling for all governments to send their Head of State and Finance Ministers to the Financing for Development Conference in Ethiopia, in July. The Addis conference will set out how the world will finance development for the next two decades and is an opportunity for governments to start developing a more democratic and fairer global tax system.
Winnie Byanyima, Oxfam International’s Executive Director said: “Africa is hemorrhaging billions of dollars because multinational companies are cheating African governments out of vital revenues by not paying their fair share in taxes. If this tax revenue were invested in education and healthcare, societies and economies would further flourish across the continent.”
In 2010, the last year for which data is available, multinational companies avoided paying tax on US$40billion of income through a practice called trade mispricing – where a company artificially sets the prices for goods or services sold between its subsidiaries to avoid taxation. With corporate tax rates averaging out at 28 percent in Africa this equates to $US11 billion in lost tax revenues.
Trade mispricing is just one of the ways multinational companies avoid paying their fair share of taxes. According to UNCTAD, developing countries as a whole lose an estimated US$100billion a year through another set of tax avoidance schemes involving tax havens.
Companies also lobby hard for tax breaks as a reward for basing or retaining their business in African countries. Tax breaks provided to the six largest foreign mining companies in Sierra Leone add up to 59 per cent of the total budget of the country or eight times the country’s health budget.
Byanyima added, “African leaders must not sit by while international tax reforms are agreed which give multinational companies free reign to sidestep their tax obligations in Africa. Political and business leaders must put their weight behind the ever louder calls for the reform of global tax rules. African nations must also introduce a more progressive and democratic approach to taxation – including calling a halt to tax exemptions for foreign companies.”
Existing international efforts to tackle corporate tax dodging such as the BEPS (Base Erosion and Profit Shifting) process, led by the Organisation for Economic Cooperation (OECD) for the G20, will leave gaping tax loopholes that multinational companies can continue to exploit across the developing world. Many African nations have been shut out of discussions on BEPS reform and will not benefit from them as a result.
Further resources
According to the UN’s Economic Commission for Africa’s Report on the High Level Panel on Illicit Financial Flows from Africa, there was a US$40 billion outflow from Africa due to trade mispricing in 2010. With corporate tax rates averaging out at 28 per cent in Africa this equates to nearly $US11 billion in lost tax revenues. Given that companies and investors from G7 countries are responsible for more than half of the foreign direct investment in Sub-Saharan Africa, companies from G7 countries may be responsible for robbing African governments of around $6 billion every year from just one tax trick alone.
Developing countries lose estimated US$100billion a year as a result of one set of tax avoidance schemes involving tax havens: see UNCTAD’s Investment Policy Hub Working Paper, ‘FDI, Tax and Development’.
Tax breaks provided to the six largest foreign mining companies in Sierra Leone add up to 59 per cent of the countries budget or eight times the country’s health budget: ‘Losing Out: Sierra Leone’s massive revenue loses from tax incentives’, London: Christian Aid.
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Burundi tax revenue declines as unrest persists
The Burundi Revenue authority (OBR) has recorded a 16 per cent tax decline for the last financial year.
The unrest that has hit the country since April has only made things worse for OBR.
Burundi is contending with protests occasioned by the ruling CNDD-FDD party's nomination of President Pierre Nkurunziza to contest for a third term in office.
The move is viewed as unconstitutional and going against the Arusha Accord that ended Burundi's long-running civil war.
OBR recorded a 32 per cent tax decline in the past one month.
Below the target
“We had several challenges, not only the unrest, but also the fuel shortage for the last months that contributed to the low revenue collections, but OBR will continue its mission to secure revenues for strengthening Burundi’s economy,” said the agency Commissioner General, Mr Domitien Ndihokubwayo.
In April, OBR recorded 9 billion francs shortfall and with the persisting protests in the capital Bujumbura, the revenue authority has now recorded another 16 billion francs below the target.
The figure is considered the least revenue collection for May for the last three years.
OBR was established by the government in 2010.
“I can’t do business for now, with this kind of insecurity most of the people are scared so we have to wait until the situation gets back to normal,” said Mr Eddy Niyirora, a trader.
OBR launched an Electronic Single Window System (ESS) early this year which allows investors to access online standardised information and documents with a single entry point.
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SA citrus exports to EU increase
South Africa’s citrus exports to the European Union (EU) increased by 9% in value last year despite having been hit by the troublesome citrus black spot fungus (CBS), said EU ambassador to South Africa Roeland van de Geer.
EU and South African scientists are still arguing over whether or not CBS could infect European citrus plants, he told journalists. But in the meantime, the exports from South Africa continue, though under strict controls to prevent fruit with the black spot on its skin, entering the EU market.
EU officials said South African citrus growers had themselves decided to stop citrus exports to EU near the end of last year’s season, because too many CBS-infected fruits bound for export were being discovered.
So the volume of exports had dropped slightly but the monetary valued had increased by about 9 percent because of higher prices in Europe.
After the citrus industry had stopped exporting from CBS affected areas, it improved its system for weeding out CBS-infected fruit. A team from the EU’s Food and Veterinary Office had recently visited South Africa and concluded that South Africa’s measures complied with EU legislation.
So exports had already begun again at the start of the 2015 season and they would continue unless there was a surge in the number of CBS-infected citrus fruits intercepted.
Van de Geer said the outcome of the joint South Africa and EU scientific investigation of whether CBS could infect EU citrus plants should hold no risks for South Africa.
If the scientists found there was a risk of infection, exports should continue under the existing control measures. And if they found there was no risk of infection, the measures could be lifted.
More than 34% of South Africa’s citrus is exported to the EU and 40% of all citrus consumed in the EU in winter was imported from South Africa.
Van de Geer strongly dismissed some suggestions from the South African side that the restrictions on CBS-infected citrus were a disguised trade protection measure. He noted, for comparison, that the recent eruption of Xylella Fastidiosa disease into southern Italy via plant material imported from Central America had forced farmers to destroy thousands of olive trees.
Van de Geer said that relations between the EU and South Africa were generally good and the annual EU-South Africa summit would take place later this year in Brussels.
It had been cancelled last year because both sides were preoccupied with elections.
Last year had been seen by some as a bad one in relations – because of disagreements over South Africa’s unilateral cancellation of investment protection treaties with individual EU member states, the CBS dispute and President Jacob Zuma’s last-minute withdrawal from the EU-Africa summit in Brussels because Belgium would not give a visa to Zimbabwean President Robert Mugabe’s wife Grace who is under a EU travel ban.
But Van de Geer insisted that the public perception was wrong and that much had been achieved last year, mainly the signing of an EU Economic Partnership Agreement (EPA) with South Africa and several Southern African Development Community (Sadc) states after protracted negotiations.
There had also been a very successful South Africa Week in Brussels, citrus sales to the EU had increased in value despite the dispute over CBS and development cooperation had continued, with a new seven-year programme of 250 million euros.
South African exports to the EU in 2014 had increased to R193 billion from R165 billion in 2013. EU exports to South Africa had increased from R284 billion to R301 billion.
And fully 50% of South Africa’s exports to the EU were of value-added goods, rather than raw materials.
Van de Geer said he expected the EPA deal – which gives both South Africa and the EU greater access to each other’s markets – would begin to be implemented later this year.
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Africa faces mounting risks to keep rising growth record going
African nations are facing mounting risks as they seek to extend two decades of rapid economic growth.
While the continent has benefited from increasing investor inflows from abroad, it’s now contending with a commodity downturn, power shortages, political instability, a slowdown in China and the prospect of higher U.S. interest rates. The International Monetary Fund last month lowered its 2015 growth outlook for sub-Saharan Africa by 1.25 percentage points to 4.5 percent. Expansion in Nigeria and South Africa, Africa’s two largest economies, is set to slow.
“Sustaining Africa’s growth is going to prove increasingly challenging,” Peter Attard Montalto, an economist at Nomura International Plc in London, said by phone on Tuesday. “External demand is volatile, global growth potential has fallen and competition for trade and investment within the continent is increasing. All countries will need to step up their game.”
Government leaders, policy makers and executives from companies ranging from Barclays Plc to BT Group Plc are meeting at the World Economic Forum in Cape Town on Wednesday for three days of meetings on how to build on Africa’s progress.
The talks will also focus on distributing wealth more evenly in a region where 585 million people, or 72 percent of the population in sub-Saharan Africa, still live in or at the brink of poverty, according to the United Nations.
Oil Boom
Surging prices of oil and other commodities helped to more than triple the size of sub-Saharan Africa’s economy since the start of 2000, according to IMF data. With a halt to the resources boom – the price of Brent crude is down 40 percent over the past year and copper has fallen 13 percent – African nations are increasingly relying on consumer spending and infrastructure expenditure to drive their economies.
“Domestic demand has continued to boost growth in many countries while external demand has remained mostly subdued because of flagging export markets,” the Abidjan, Ivory Coast-based African Development Bank said in a May 25 report.
“So far, African economies have been relatively resilient to the sharp fall of international commodity prices,” the bank said. “But if commodity prices remain low or decline further, growth in resource-rich countries might slow down as governments need to cut spending.”
Africa attracted $128 billion in foreign direct investment last year, up from $52.6 billion the year before, even as the number of projects fell by 8.4 percent, accounting firm Ernst & Young said in its annual Africa attractiveness survey released in Cape Town on Tuesday.
Losing Appeal
Forty-four percent of the spending was on projects in the real estate, hospitality and construction industries, while oil, natural gas and coal accounted for 25 percent, it said.
Nine of the world’s 15 fastest-growing economies are in Africa and most investors remain positive about the continent’s prospects, EY Africa’s Chief Executive Officer Ajen Sita told reporters in Cape Town. Detracting from that are an Ebola virus outbreak in West Africa, Islamist militant insurgencies in Nigeria and Kenya and political upheavals in countries such as the Central African Republic and South Sudan, he said.
“Although tremendous progress has been made over the past 15 years, Africa and its leaders are poised at an inflection point,” Sita said. “Deliberate and urgent choices are required to raise levels of productivity and competitiveness, accelerate structural transformation and make the shift toward an inclusive, sustainable growth path.”
An EY survey of more than 500 business executives in 30 countries identified Africa’s political instability, corruption, poor security, lack of infrastructure and a scarcity of skilled labor as the biggest deterrents to investors.
For John Mackie, head of Johannesburg-based Stanlib Asset Management’s Pan African Investment portfolios, investing in the continent is for the long haul.
“It’s a patience game,” he said by phone from Johannesburg on Tuesday. “It’s going to take time” for the continent to realize its full potential.
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Eliminating counterfeits: Laws alone not enough
To stem the ever-rising threat of counterfeit products on the East African Community (EAC) market, governments in the bloc are enacting tough laws and stringent measures against those importing and dealing in counterfeit products.
Legislation at the EAC secretariat, for example, seeks to enjoin owners of commercial buildings as well: every landlord must ensure that their tenant businessmen do not deal in counterfeit products.
How will an ordinary mwananchi owning a building in Bungoma, Rwakiruuri, Nyagatare, Ombokolo, Buyenzi, Nyakanyansi, or any other rural township in East Africa know whether his tenant businessman is selling a fake BIC pen or a genuine one?
Legislation alone will not be enough. As legislation progresses, the East African Business Council must take the lead into the following measures:
Establishing a industrialists’ data bank
We must establish a manufacturer data bank of virtually every item imported into the EAC bloc, the way it is done for pharmaceuticals.
Every manufacturer and brand owner worth the name will have a website detailing its product range, market coverage, distribution chain, and all the vital information.
The respective commercial attachés’ in foreign missions must provide supplementary support in this exercise. With the data bank, it is possible to separate fake products from genuine ones.
Rethinking liberalisation, strengthening regional markets
We are reaping the fruits of unfettered liberalisation, which is slowly degenerating into anarchy. Yet there are enough provisions in the World Trade Organisation (WTO) agreements and protocols, which can be used to enforce protection. Counterfeiting and sub-standard goods are not protected by WTO provisions.
The argument that brand new, genuine products are expensive, so the citizens cannot afford them is self-defeating. Genuine goods are expensive because their market is eaten-into by fakes and mitumba.
If a trader, importing genuine leather shoes sells only one pair in a month, he will hike the price, to cover his operational costs. If he sold a hundred pairs, (the way the fake dealers do), his prices would be affordable.
One common advanced argument in favour of liberalisation is that our markets are small, so we need to ‘go global’.
By 1992, data with the PTA Bank showed that the then PTA zone could meet 80 per cent of its needs through intra-regional trade. What happened to this market potential?
Have we fully exhausted this, before seeking ‘global’ markets whose terms and conditions of access end in favour of the developed world and to our detriment?
As Cambridge Prof Ha Joon Chang argues, world trade has never been free trade “…virtually all of today’s developed countries actively used interventionist trade and industrial policies aimed at promoting, not simply protecting infant industries during their catch-up periods…the current orthodoxy advocating free trade and laissez-faire policies seems at odds with historical experience, …developed countries that propagate such a view seem to be ‘kicking away the ladder’ that they used in order to climb up to where they are...”
The way forward
The ultimate break-through will be a clearly defined EAC industrialisation path, defined on the following key tenets:
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Declare 2015-2025 EAC Industrialisation Decade, with policies and strategies similar to those employed by the developed world during their ‘catch-up periods’. Go beyond ‘summit themes’, and define what industrialisation path we should take, given our levels of technology and resource endowment.
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Industrialisation occurs at different levels namely, Resource-based (RB); Light Technology (LT); Medium Technology (MT) and High Technology (HT). All these are possible in EAC at varying degrees.
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Fast-track the incorporation of the East African Development Corporation (EADC), owned only and fully by the five EAC states. This will be a holding company, with the mandate to champion industrialisation in the region, in close concert with the East African Development Bank, the private sector and social security funds.
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Identify key sectors in the region for priority state investment through EADC, in majority shareholding with EAC corporates, institutions, individuals and foreign investors in that order.
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Zoning of the investment sectors throughout the Community, guided by the respective levels of industrial development, natural resource base, labour and skills. Only then will integration have meaning to EAC wananchi beyond conferences and summits.
Enforce trade regulation
The liberalised trade regime has seen the rise of brief-case businessmen. This is evidenced in the ‘Dubai phenomenon’: anybody now can travel to Dubai and import anything, pay (or evade) taxes, and flood the market with all sorts of fakes. With regulated trade, every product will have a known and traceable value chain.
Take branded television brand called Mvule;
Manufacturer: Mvule Corporation of Kyoto, Japan
Licenced Assembler in Africa: Mukunyu Industries Ltd, Kyenjojo, Uganda
Authorised COMESA Distributor: Musasa Distributors of Rwamagana, Rwanda
East African Distributor: Mgumo Stores, Nyeri, Kenya
Wholesalers: Authorised wholesalers across East Africa.
Retailers: Retail outlets all over the region.
Such a streamlined value chain will leave little space for counterfeits.
The author is a partner at Peers Consult Kampala and CET Consulting, Kigali.
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Investment Climate: The Journey so Far
On 28th May 2015 ICF and the African Development Bank held a joint event to promote investment climate reforms in Africa. The event, titled “Investment Climate: The Journey so Far”, was held as part of the African Development Bank's Annual Meetings which took place in Abidjan, Ivory Coast, from 25th to 29th May 2015.
The event explored the progress that has been made so far in improving the investment climate in Africa and called for countries to make greater changes and to do it faster.
Conversation with Leaders
The event provided an opportunity for participants to hear from Benjamin Mkapa, former President of Tanzania and ICF Co-Chair, and also from Daniel Kablan Duncan, Prime Minister of Ivory Coast.
Prime Minister Duncan explored the benefits that Ivory Coast has received from improving its business environment and giving the private sector an opportunity to contribute to economic growth. This includes a bridge that was constructed through private sector funding, and the provision of electricity by the private sector. “We think the private sector should be the driver of change,” the Prime Minister said, adding that government does not always have the funding to provide the infrastructure that the country needs.
The Prime Minister also pointed out the need for governments to improve their performance in order to reduce bureaucracy and work with the private sector in a more efficient manner. “We need to retrain people to improve the effectiveness of our administration. Time is money and we need to move faster,” he said. He called for the use of information and communication technologies to improve government efficiency because, as he put it, “they provide a shortcut to development”.
President Mkapa highlighted the fact that many countries are afraid of integration, and have the wrong belief that integration will reduce their independence. “Integration actually enables you to develop and therefore to enjoy your independence in larger freedom,” he pointed out. He urged African governments to focus less on politics and more on the economy so that they can see the benefits that economic integration offers.
He also called for governments to not only give the private sector a chance, but to also pay attention to the feedback they provide as they are best placed to say whether economic policies are working or not. “Make a deliberate effort to listen to the private sector,” he urged.
Engagement with Public Sector, Development Partners and Captains of Industry
A panel consisting of Public Sector officials, Development Partners and Captains of industry explored the progress that African countries have made in creating a conducive environment for business and the gaps that still exist.
The panellists included Baroness Lynda Chalker, former UK Minister of Overseas Development, current ICF Trustee and Chairperson of Africa Matters; Ebenezer Essoka, Standard Chartered Bank's Vice Chair of Africa; Naglaa Al-Ahwany, Egypt's Minister of International Cooperation; Jean-Louis Ekra, Afrexim Bank CEO; Thomas Duve, KfW's Director of Regional Funds; Mahamadou Sylla, IPS CEO; and Abdourahmane Cisse, Ivory Coast's Minister of Budget.
From the discussions, it was evident that many African counties have, in the past decade or so, made efforts to improve the investment climate in an effort to boost their economies. These reform efforts are bearing fruit and businesses are benefiting.
However, a lot more needs to be done to enable businesses in Africa to operate in a fair and transparent environment. One of the areas that was highlighted by the private sector as needing urgent improvement in many countries is the legal system and especially mechanisms for resolving commercial disputes. Another area was the need to build the capacities of small and medium enterprises to enable them to succeed. “Many Africans come up with great ideas, but these ideas need to be turned into bankable business plans,” said Jean-Louis Ekra, CEO of Afrexim Bank.
Mahamadou Sylla, CEO of IPS, pointed out that improving the investment climate is one thing. Equally important is the need for governments to improve their day to day interactions with the private sector so that businesses are treated in a fairer manner.
Abdourahmane Cisse, Ivory Coast's Minister of Budget, explained that governments are paying closer attention to the private sector and are hearing their call for government to improve the business environment. He gave an example of Ivory Coast where the Government has made efforts to reduce bureaucracy. “We have heard the private sector and we are making improvements in how we work with them,” he said.
Benjamin Mkapa, ICF Co-Chair and former President of Tanzania, called upon African countries to increase the pace and scope of investment climate reforms so that Africa can achieve the economic progress it urgently needs.
And to help countries achieve this, ICF and AfDB are increasing their collaboration through joint investment climate projects, analytical work, and promotion of the investment climate in Africa.
About 300 participants attended the event.
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The selection: Tuesday, 2 June
COMESA-EAC-SADC Tripartite Sectoral Ministerial Committee: Statement (SADC)
The Joint Meeting of the COMESA-EAC-SADC Tripartite Sectoral Ministerial Committee took place on 29th-30th May 2015 in Dar es Salaam. The purpose of the meeting was to consider progress made in preparation for the Third COMESA-EAC-SADC Tripartite Summit to be held on 10th June 2015.
Ministers reiterated the importance of making tariff offers and concluding related negotiations expeditiously. In this regard they decided that Member States that had not exchanged tariff offers do so within 6-12 months and those that have exchanged and are negotiating tariff offers should endeavour to conclude within 12 months. They noted that rules of origin are a crucial element for the TFTA and therefore Member States needed to expedite work to finalise outstanding areas and agree on the Tripartite rules of origin that will be applied in the new TFTA.
The Meeting also endorsed the transitional arrangements on trade remedies that will apply to the TFTA pending the finalisation of a complete Annex in this area. It should be noted that the TFTA Agreement already includes detailed dispute settlement disciplines and a completed Annex on Tripartite Dispute Settlement Mechanism.
25th Assembly of Heads of State and Government of the African Union
The Heads of State and Government will exchange views on: the report of H.E. Mr. Macky Sall, President of the Republic of Senegal and Chairperson of NEPAD Heads of State and Government Orientation Committee; the report of H.E. Mr. John Dramane Mahama, President of the Republic of Ghana and Chairperson of the High Level African Trade Committee...
Africa: Rising for the few (Oxfam)
Africa was cheated out of US$11 billion in 2010 through just one of the tricks used by multinational companies to reduce tax bills, according to new Oxfam report, ‘Africa: Rising for the few,’ released today. This is equivalent to six times the amount needed to plug the healthcare funding gap in Ebola affected countries of Sierra Leone, Liberia, Guinea and Guinea Bissau. Oxfam’s findings come as African political and business leaders get set to attend the 25th World Economic Forum Africa in South Africa. The main theme of the meeting will be how to secure Africa’s economic rise and deliver sustainable development. Reforming global tax rules so that Africa can claim the money it is due – and which is needed to tackle extreme poverty and inequality – is critical if the continent is to continue its economic rise. [Download]
Are SA’s new visa rules too much? (Business Report)
The International Air Transport Association notes with concern South Africa’s new immigration measures that were supposed to come into effect on Monday, including requiring adults travelling with children to carry unabridged birth certificates. IATA fully supports South Africa in its laudable campaign to combat child trafficking. But just how big is the problem? Is the country dealing with a problem of crisis proportions? And how much of it takes advantage of airlines serving South Africa’s major international airports? [The author, Raphael Kuuchi, is the vice-president, Africa, for the International Air Transport Association]
Michael Rake: 'A reinvigorated trade agenda necessary for all the countries' (IOL)
But where is South Africa in this torrent of trade dialogue? It seems to be taking something of a cautious approach, particularly to bilateral dialogue. It has not joined the TiSA dialogue in Geneva, and has seemed to put less emphasis on pursuing free trade agreements than some major emerging economy nations. The current difficulty in achieving progress via the Doha Round may mean that South Africa needs to devote more resources to trade outreach, as do other Brics and MINT nations.
Virusha Subban, Nkuleko Khumalo: 'South Africa must pursue US free-trade deal' (Business Day)
The proposed 10-year extension of AGOA, if passed, will provide some breathing space and an opportunity for SA and its SACU counterparts to seek to secure a contractual trade arrangement with the US. This is clearly time to reopen the stalled or failed US-SACU free-trade negotiations. [The authors are attached to Bowman Gilfillan]
Lesotho may lose 35000 jobs if US drops AGOA trade access (Bloomberg)
South Africa: DA calls for debate in Parliament over cost of AGOA exclusion (Demcoratic Alliance)
Rob Davies: 'Are companies investing in South Africa?' (ANC)
Kenya: Botswana retailer bids to take over 10 Ukwala stores (Business Daily)
Botswana’s retail chain Choppies on Monday said it had struck a deal to buy mid-tier Kenyan supermarket Ukwala for close to Sh1 billion, marking its entry into East Africa’s biggest economy. Choppies is entering the Kenyan market through a joint venture with the promoters of Export Trading Group, a Tanzania-based agri-business and logistics company.
Tanzania to sign second MCC compact (IPPMedia)
Tanzania is in a much better position to sign the second Millennium Challenge Corporation compact programme which focuses on power sector following the government commitments to put in place strategic reforms. Kamran Khan, Vice President of the Department of Compact Operations at the Millennium Challenge Corporation said yesterday: “MCC is impressed with government commitments in the undertakings.”
Tanzania: Dream come true as major railway line projects take off (Daily News)
Major railway infrastructure projects to link Tanzania with her landlocked neighbours are now set to take off. Analysts say that railway network will stimulate the economy and prosperity of the region as it will boost trade and investments and create thousands of job opportunities. But, on the other hand, a good railway network will make Tanzania a truly regional hub for transport and help the country make optimal use of her strategic geographical positioning which had remained manifestly underutilised for many years. Tanzania is a gateway to several landlocked central African countries including Burundi, Democratic Republic of Congo (DRC), Malawi, Rwanda, Uganda and Zambia.
Mozambique: Agriculture exports drop 23% – why should we care? (SPEED)
Traditional agricultural exports were down 23% in 2014 compared to 2013, according to the Bank of Mozambique. Falling world prices meant exports of tobacco were down 40% and of sugar 8%. SPEED has found that Mozambique’s agricultural production is not competitive. This directly affects us as consumers and citizens.
Namibia: Access to global meat markets vital (New Era)
Following the widespread occurrence of Rift Valley Fever (RVF) in South Africa in 2010, and apparent spill-over into Namibia and the recent upsurge in occurrence of foot and mouth disease (FMD) outbreaks in the Southern African Development Community (SADC) region, a risk analysis for imports of livestock and meat and meat products into Namibia was seen as important. A recent investigation which examined the animal disease situation in countries that contribute to the Kavango-Zambesi (KAZA) Transfrontier Conservation Area (TFCA) as well as countries that border on those KAZA TFCA countries concluded that:
Namibia and Mozambique discuss new trade cooperation (Spy Ghana)
Namibia and Mozambique have a fishing agreement made in 2012 which allows the two countries to fish in each other’s waters. The two countries has allocated each about 36, 000 tons of fishing quotas over a five-year period through different fishing joint ventures. During the meeting in Abuja, Nyusi expressed the hope that both Namibian and Mozambican fishing companies will fully utilize the agreement from this year.
Uganda: Bitter sugar story (The Independent)
Having studied the Uganda commercial sugar industry over the past five years, the evidence emerging suggests that this is a sector which does not enjoy a comparative advantage in sugar production relative to other countries in the world. Sugar is number 1 trading commodity in the world, and according to the Global Ranking Report of 108 Sugar Producing Countries for 2013, Uganda is ranked number 38 in sugar production and number 41 in sugar yields per hectare. The table shows that SADC Sugar Producing countries have a comparative advantage of early market production of 9-12 months while Uganda requires 15-18 months (depending on whether its ratoon or plant cane crop). This translates into a a market lead-time or lag time of 6 months for Uganda. [The author, Michael Mugabira is a doctoral student at the UCT Graduate School of Business]
Better agriculture policies in the EAC (East African Business Week)
International conference on Africa's fight against Ebola (AU)
In line with the decision of the Assembly, the international conference will be organized in Equatorial Guinea from 20 to 21 July 2015 by the AUC, in collaboration with Liberia, Guinea, Sierra Leone and Equatorial Guinea, as well as ECOWAS and the Manu River Union. The conference on Ebola has strong propensity to provide an opportunity for Africa to take action and progress towards achieving robust national health systems that are adequately staffed and financed, that are resilient to shocks and health threats, and that are able to reach all people with good quality preventive and curative services. Within this, is the opportunity for analyzing concomitant approaches for better preparedness to confront and deal with outbreaks of communicable and non-communicable diseases as well as other public health emergencies.
SADC ministers: 'Increase funding for gender programmes' (The Herald)
“Ministers recommended that member-states, in consultation with Ministers of Trade, Investment and Industry, develop a regional multi-dimensional women’s economic empowerment and explore ways of enhancing women’s access to financial resources and markets and establish mechanisms and instruments to facilitate their access to finance for economic empowerment,” she said.
Azevêdo voices concern with slow progress in key negotiating areas (WTO)
Nigerian-Chinese Council promotes local Chinese industries (Leadership)
Community processing centres to drive Rwanda's industrial development - NIRDA (New Times)
Tanzania hosting Africa forum on electronic IDs (IPPmedia)
Uganda: How to widen tax base to gain additional revenue in next budget (Daily Maverick)
Republic of Congo: IMF completes 2015 Article IV Mission (IMF)
Vale Moçambique starts exporting coal via the port of Nacala this year (MacauHub)
Start of ethanol and sugar production increases diversification of Angola’s economy (MacauHub)
Budget reform before and after the global financial crisis (OECD)
Building financial sectors that support development (World Bank)
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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Building financial sectors that support development
Policy makers around the world continue to balance the demand for stringent oversight of the financial industry with the need for a well-developed sector that supports productive firms and broad-based financial inclusion. Nearly a decade since the start of the global financial crisis, stakeholders are asking: How can governments enable dynamic financial sectors that contribute to stable economies and sustainable growth?
From May 4th-8th, the Research Department and the Finance and Markets Global Practice hosted the 12th Overview Course of Financial Sector Issues 2015: Building Financial Sectors that Support Development. This week-long training event covers the fundamentals of the financial sector and identifies emerging issues relevant to policy makers. Officials from central banks, ministries of finance, and regulatory agencies as well as World Bank Group staff members were in attendance.
Every year, the World Bank organizes this workshop to bring together academics, policy makers, and development practitioners. Notable speakers this year included Viral Acharya (New York University), Thorsten Beck (Cass Business School and Tilburg University), and Simon Johnson (MIT).
Setting the stage for the week, Simon Johnson (MIT) gave an overview of the evolving role of banks and bank supervision in the US, starting from its early stages in the 19th century through the deregulation of the 1970s and the recent regulatory response to the financial crisis of 2008 – 2009. Johnson described current measures to increase leverage ratios as “small progress at the heart of the world’s financial system,” and called for bank regulators to focus on straightforward capital adequacy requirements as a robust and hard-to-game mechanism to ensure a stable banking sector.
Turning to an issue that is on the minds of many developing country policy makers, Director of Research Asli Demirguc-Kunt discussed long-term finance and its role in supporting economic development. Demirguc-Kunt identified the presence of an active long-term finance market in a developing country as a mark of regulatory strength and an economy in which investors have confidence. “When we see a high level of short-term finance, we worry that providers are concerned about macroeconomic stability and borrower risk,” she said. She urged policy makers to focus on promoting macroeconomic stability and to strengthen regulatory and institutional frameworks rather than supplying government guarantees to avoid crowding out private sector engagement.
The event also focused on the role of finance in meeting the needs of the poorest. A panel session featuring Lead Economist Leora Klapper, Global Lead for Financial Inclusion Douglas Pearce, and Technical Adviser and Regional Manager Xavier Faz took stock of the progress achieved so far in expanding financial access and what can be done to keep the momentum going. According to the recently launched Global Financial Database 2014 (Findex), 62 percent of the world’s adults now have accounts, up from 51 percent in 2011. However, women and the poor continue to lag in terms of access. Since 2011 the gender gap has remain unchanged, with a persistent nine percentage point gap in account ownership in developing countries.
The week of events also exposed participants to a wide variety of specialized topics related to finance, including pension systems, capital markets, SME finance, financial literacy, and disaster risk management.
The Overview Course of Financial Sector Issues takes place annually each spring—interested participants for next year’s course can check the All About Finance blog in early 2016 for details.
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Joint Meeting of the COMESA-EAC-SADC Tripartite Sectoral Ministerial Committee: Statement
The Joint Meeting of the COMESA-EAC-SADC Tripartite Sectoral Ministerial Committee took place on 29th-30th May 2015 in Dar es Salaam. The purpose of the meeting was to consider progress made in preparation for the Third COMESA-EAC-SADC Tripartite Summit to be held on 10th June 2015.
The Tripartite Summit launched the Free Trade Area in 2011 when SADC took over the chairpersonship and will be handing over the chairpersonship to COMESA at the third Summit scheduled to take place in June, 2015. Negotiations are at advanced stages and the COMESA-EAC-SADC Tripartite Free Trade Area is expected to be launched at Sharm El Sheikh on 10th June, 2015.
When concluded, the Tripartite FTA will encompass 26 Member States, that is, half of the African Continent with a GDP of over US$1.2 trillion that represents over 50% of the Continent’s GDP, and a population of 625 million. When operational, it will become a means for enhancing economic inter-linkages and enabling business environment to unlock regional potentials, scale up productive capacities and competitiveness, stimulating beneficiations and value chains, enhancing technological set-ups. More importantly, the TFTA will also address the issue of overlapping membership that has resulted in a number of challenges for the region’s business and trading community. It is foreseen that the TFTA will constitute an important foundation for the continental free trade area negotiations that will be launched by the African Union Summit in June 2015 towards the realisation of Agenda 2063 of the African Union.
Ministers reiterated the importance of making tariff offers and concluding related negotiations expeditiously. In this regard they decided that Member States that had not exchanged tariff offers do so within 6-12 months and those that have exchanged and are negotiating tariff offers should endeavour to conclude within 12 months. They noted that rules of origin are a crucial element for the TFTA and therefore Member States needed to expedite work to finalise outstanding areas and agree on the Tripartite rules of origin that will be applied in the new TFTA.
The Meeting also endorsed the transitional arrangements on trade remedies that will apply to the TFTA pending the finalisation of a complete Annex in this area. It should be noted that the TFTA Agreement already includes detailed dispute settlement disciplines and a completed Annex on Tripartite Dispute Settlement Mechanism.
It is worth noting that the SADC region has adopted a Strategy and Roadmap on Industrialisation and therefore the incorporation of the pillars on Industry and Infrastructure are important and strategic components for the success of the Tripartite agenda. From a SADC perspective the Industrialisation work programme should result in the economic and technological transformation of the region, engender competitiveness as an active process to move from comparative advantage to competitive edges, reinforce regional integration and ultimately the development and economic prosperity of the Community. SADC would be implementing this strategy jointly with other regional priorities outlined in the Regional Infrastructure Development Medium Term Plan and the Regional Indicative Strategic Development Plan.
The SADC Industrialisation Strategy is anchored on three pillars, namely: Industrialisation as a champion of economic and technological transformation; competitiveness as an active process to move from comparative advantage to competitive edges, and Regional integration and geography as the context for industrial development and economic prosperity. The important features of the Industrialisation Strategy are focused programmes aimed at enhancing economic inter-linkages to unlock regional potentials, scaling up productive capacities and competitiveness, stimulating beneficiations and value chains, enhancing technological set-ups, and improving the business enabling environment. The implementation of the strategy will be underpinned on sound policies and appropriate enabling environment across the Member States.
In the area of ICT, commendable progress has been made in the SADC region with the roll out of Digital Terrestrial Migration equipment given the looming ITU switch-over deadline of 17 June, 2015.
SADC has developed and adopted the Regional Infrastructure Development Master Plan (RIDMP) which defines SADC’s infrastructure development strategy and constitute basis for prioritization of projects, as well as the modus operandi for implementation. The RIDMP constitutes the approved SADC Regional Infrastructure Development Programme and guides the process of selection and implementation of regional infrastructure projects at the level of feasibility assessments, preparation for bankability and investment. It also constitutes the basis for SADC Member States commitment to a common infrastructure development programme.
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Azevêdo voices concern with slow progress in key negotiating areas
Director-General Roberto Azevêdo convened a meeting of all WTO members in Geneva today (1 June) to discuss the current state of play in negotiations on the work programme to advance the remaining issues of the Doha Development Agenda.
Members agreed in November 2014 to agree a work programme by July this year as a springboard towards the WTO’s 10th Ministerial Conference in Nairobi in December. The Director-General gave a detailed briefing to members on recent consultations, covering a range of Doha issues, but with an important focus on the three key areas of agriculture, industrial products and services.
DG Azevêdo said:
“We are still seeing good engagement – and this is positive. We have been having detailed conversations across a range of issues, and in some areas we are seeing progress. However, on the basis of the discussions I have had over recent weeks, I am becoming increasingly concerned that we are not making the progress that is needed in the key areas of agriculture, industrial products and services.
“Agreeing on a work programme was never going to be an easy task. But as of today we are still waiting for the necessary convergence on key issues in order to deliver the outcome we need by July and to help us build towards a successful ministerial meeting in Nairobi in December.”
The Director-General outlined, as he had on previous occasions, that this work will continue over the coming weeks in the WTO’s various Negotiating Groups, through the Director-General’s own consultations, and through meetings convened by members or groups of members. He reiterated his commitment to the transparency and inclusiveness of the negotiating process, which was a crucial element of the success in Bali in 2013. Today’s meeting was the seventh meeting of the full membership convened so far this year.
Commenting on the forward process, the Director-General said:
“I will ensure that meetings of the full membership are held even more frequently from now on to ensure that members are fully briefed on all aspects of the negotiations. This will be essential to ensure that the necessary political calls can be taken in due course.”
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Better agriculture policies in the EAC
East African community countries have been urged to come up with policies that support small farmers to participate effectively in the Agriculture sector where they contribute about 60%.
Uganda’s Minister in charge of East African Community Affairs Shem Bageine in his speech read by the Commissioner of production and Social services in the Ministry of East African Affairs Ronah Sserwada during the East African Community Agriculture Budget Summit held at Entebbe said that it’s the responsibilities of the Governments in the community to guarantee the thrives of Agriculture sector in the Five member states of EAC.
“Member states should create a conducive, policy, Legal and program frame work that supports the growth and expansion of Agriculture sector where the major stake holders are small farmers who need much support from their Governments,” the minister said.
The Minister noted that the Agriculture sector contributes much in the regional Economies but because of the lack of pro-small farmer’s policies the sectors contribution in the regional Gross Domestic products is declining For stance the Minister said that the Contribution of Agriculture sector in the Economy of Burundi has decline by 34%, Kenya 29% Rwanda 32% Tanzania 25% and Uganda at 23%.
Bagaine in his speech told participants majority being small farmers from all over the Five member states that East African Community has established Regional Integration protocols Where member states committed themselves to co-operate to attain Food security and rational agriculture production through the community by promoting complementarity and specialization in order to increase productivity, Food Sufficiency, exports and Agro based Industries but such objectives may not be achieved if the larger population (small scale farmers) are not supported.
Presenting the overview of the state of Public Financing for Agriculture in the East African Community, David Walakira, the Budget Analyst at the Civil Society Budget Advocacy Group (CSBAG), said the Agriculture sector growth in the Community block is still ragging behind the 6% Sector Annual Growth which was set up by the African heads of states during the Maputo declaration in 2003 and its failure is attributed to the poor funding of the sector by the regional Governments.
“This call for the examination of Government priorities and the need to call up on national Governments to allocate more funding to the agriculture sector and work towards an annual sector growth of 6% as captured in the Maputo declaration of 2003 and the Malabo declaration of 2014,” he advised the EAC Governments.
EAC country Draft Budgets for the financial year 2015/2016 indicates that Rwanda in the financial year has allocated 5.9% of her total Budget, Uganda 3.35% Kenya 3.15%. This is still far behind the proposed 10% African Heads of states agreed on during the Maputo declaration.
According to the Maputo declaration all Heads from the African Union agreed that 10% of their Country’s Total Budget should be allocated to Agriculture Sector however. According to Walakira no single Government from the EAC has implemented the declaration.
The Two declaration are fundamental towards the development of the Agriculture sector if are well implemented for stance the recent Malabo declaration which meant to transform Africa’s Agriculture and Food Security sector Using the Comprehensive African Development programme (CAADP).
Some of the Objectives of the Malabo declaration 2014 is to End Hunger by 2025, Halving Poverty also by the year 2025 and boasting Intra-African Trade in Agricultural commodities and services. However the Budget Expert said such Economic Objectives will remain on paper if African Governments particularly those in EAC do not implement the Maputo protocol which calls for the allocation of 10% of the total Budget to the Agriculture sector which is employing about 60% of the Total population in EAC.
Participants in the Agriculture Budget said because of the poor funding of the sector it has made the cost of Agriculture production to be very expensive especially to the small Scale farmers in the EAC block especially in countries prone to droughts.
Philippe Rivuzumwami small scale farmer from Burundi said the Agriculture sector in his country is doing badly in some parts of the Country especially in the North which are prone to Droughts and in Southern parts of the Country where they experience some moderate of Rainfall, the soil is not fertile this call s for the Application of fertilizers and Irrigation.
“Our Farmers in Burundi cannot afford to pay for Irrigation services and Buy fertilizers that is why the sector’s contribution to our GDP is declining as farmers we call up on Governments in the region (EAC) to subsidizes the prices for modern farming practices that is when small scale farmers will effectively participate in the Agriculture Sector,” he said during the Budget Meeting.
The EAC agriculture Budget summit attracted stake holders from Governments Civil societies Academia and policy makers from the parliament of Uganda. The Regional Agriculture Budget Summit was Jointly organized by the Civil Society Budget Advocacy Group (CSBAG) Action Aid Uganda and Eastern and Southern Africa Farmers Forum (ESAFF) and its Objectives was to enable small scale farmers to Understand how the Regional Countries are performing in allocating resources to the Agriculture sector.
Other participants especially those from Uganda pointed out factors such as the presence of fake seeds on the market, Inadequate access to financial services from credit institutions coupled with lack of Access to Agricultural Extension services by majority Local farmers as the major obstacles pending Small scale farmers to progress in Agro based related Business in the Country .
Responding to farmers, Samuel Ssemanda, the Commissioner for Agriculture planning in the Ministry of Agriculture Animal Industry and Fisheries, said the Ministry has developed a new comprehensive Agriculture policies which are pro small scale farmers sin the country.
“The Government has come up with new Agriculture sector policy which will focus on supporting local farmers through the implementing the National Agriculture Advisory Services-single spine Extension services system where Local farmers will get access to Agricultural Extension services from services providers at the Lower Local Governments,” he assured the participants in the forum
According to the Ministerial Policy Statement of the sector, the implementation of the single spine extension system is apriority in the financial year 2015/2016 in order to implement the new system the Ministry requires about UGX39billion to fully staff and pay salaries for the vacant extension staff in all districts and sub counties in accordance with the new staff structure.
The new structure provides for one veterinary Officer, Agriculture and Fisheries officers at the District level at subcounty level and at the District level the structure provides for One District production Coordinator, one principle Agricultural officer one principle Veterinary officer and Fisheries officer the combination of the two structure will be responsible for Implementing the Single spine extension systems
Uganda’s former Minister of Agriculture Animal Industry and Fisheries Victoria Sekitoleko told the East African Business Week that farmers need the Advises of the Agricultural Extension Services providers saying this can lower the cost of Agricultural production.
“Some farmers are ignorant about certain types of agricultural inputs such as seeds pesticides and fertilizers but if there’s that opportunity of interacting with Extension services providers some of the information gaps can be closed thus lowering the cost of Agricultural production being incurred by the farmers in the rural areas,” the former Minister said.
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The selection: Monday, 1 June
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Zambia: follow-up to 2nd UN conference on Landlocked Developing Countries (UN-OHRLLS)
The Zambian Government together with the United Nations Office of the High Representative for Least Developing Countries, Landlocked developing Countries and Small Island Developing States and development partners will from 2nd to 4th June 2015 hold a three day follow-up meeting to The Second United Nations Conference on Landlocked Developing Countries that was held in Vienna, Austria in November 2014. Since it is being organized shortly before the Financing for Development Conference in July 2015 and the UN Summit in September 2015 which will adopt the post-2015 development agenda, the meeting will also aim to establish linkages with these global processes. The specific objectives of the meeting are to:
Largest free trade area set for launch (COMESA)
The Tripartite FTA offers significant opportunities for business and investment within the Tripartite and will act as a magnet for attracting foreign direct investment into the Tripartite region. The business community, in particular, will benefit from an improved and harmonized trade regime which reduces the cost of doing business as a result of elimination of overlapping trade regimes due to multiple memberships. The launching of the Tripartite Free Trade Area is the first phase of implementing a developmental regional integration strategy that places high priority on infrastructure development, industrialization and free movement of business persons.
Draft Africa trade deal gets 26-member nod (The EastAfrican)
Trade experts who attended the last TFTA ministerial meeting in Dar es Salaam told The EastAfrican that a number of member states failed to produce tariff offers for the private sector to work with but endorsed the draft agreement on the basis of the principle of variable geometry. “We endorsed the draft because without it, there won’t be any TFTA to talk of and we will as a continent be the laughing stock of the world,” said Francis Mangeni, director of Trade, Customs and Monetary Affairs at Comesa. [Tripartite Website 2015]
African leaders decide to skip WEF (Business Day)
The African Union summit, which opens in Johannesburg next week, has dented the guest list for the World Economic Forum on Africa that will be hosted in Cape Town this week. Only two heads of state, SA and Egypt’s, will attend the WEF event. In 2013, nine African heads of state went to the forum when Cape Town last hosted it, and there were more than a dozen in attendance at last year’s event in Abuja, Nigeria. WEF officials said most African presidents and prime ministers were reluctant to travel to SA twice in so short a space of time.
Kenyatta urges SEAMIC to protect Africa from mining exploitation (African Quarters)
President Uhuru Kenyatta has urged an African mining organization to develop policies that will make the continent reap maximum benefit from the mining industry. He said the Southern and Eastern African Mineral Centre (SEAMIC) must ensure African countries are not short changed by multinational corporations extracting minerals in the continent. “We should not allow multinational companies to play us against one another by imposing unnecessary competition among us. They should be made to find the same mining conditions across the continent,” President Kenyatta said.
Region opts for 'homegrown' African mining watchdog (The EastAfrican)
African countries are seeking to pull out of an international initiative that tracks governance in the mining sector and form one of their own. Kenya, Uganda, Tanzania, Sudan, Ethiopia, Angola and Mozambique have called for the formation of a parallel transparency organ for mining in Africa. Ministers and ambassadors from the seven countries, who met in Nairobi on Wednesday, called for Africa to form an alternative to the Norway-based Extractive Industries Transparency Initiative (EITI). Of the seven countries only Tanzania, Ethiopia and Mozambique are members of EITI.
Tanzania leads region in earnings from minerals (The EastAfrican)
AfDB gathers ideas for African Natural Resources Center strategy (AfDB)
How to ensure Africa’s natural wealth stays in Africa (AfDB)
Japan push into Africa resources sputters, helps China (The Namibian)
South Africa: April trade statistics (SARS)
The South African Revenue Service (SARS) has released trade statistics for April 2015 that recorded a trade deficit of R2.51 billion. This figure includes trade data with Botswana, Lesotho, Namibia and Swaziland (BLNS). Africa: Trade surplus of R17 333 million - a 15.9% increase. BLNS (only): Trade surplus of R8.60 billion. [Download]
How SA investors are quietly increasing presence in Kenya (Daily Nation)
Last year, South Africa was concerned after several of its business brands failed in attempts to invest in Kenya and deployed experts to find out what went wrong and how to fix it. South Africa Inc was conducted in partnership with Brand Kenya and returned negative results about Kenyans’ perceptions of South Africa businesses and their managers as “imposing, aggressive and ignorant of the local reality.” The report made public this year concluded that Kenya’s perception of South African business stemmed from “how South Africa managers conduct themselves and treat Kenyans.”
Zimbabwe-China trade shrinks 43% (The Herald)
Trade between Zimbabwe and China, one of the country’s largest trading partner shrunk 43% in the first quarter compared to the same period last year. Bilateral trade between the two countries reached $360m during the first quarter, according to China’s Economic and Commercial Counsellor’s Office in Zimbabwe. As trade remains in favour of Zimbabwe, exports declined by 51,4% to $274m while imports from China totalled $85m, an increase of 36,7%.
Namibia, Angola currency agreement set for June (The Namibian)
The Bank of Namibia and Banco National de Angola have agreed that the currency conversion agreement will come into effect on 18 June. The agreement will facilitate reciprocal conversion of the national currencies of Namibia and Angola at the border towns of Oshikango and Santa Clara, the central bank said.
Reforms needed to avoid middle income trap – Bank of Botswana (Mmegi)
Promotion of inclusive growth and continued evolvement of institutions are some of the key reforms Botswana has to implement if it is to graduate from a middle to higher income country, the Bank of Botswana has advised. Addressing the media in Gaborone this week, Deputy director of the monetary and financial stability division, Mathew Wright said that tackling the constraints to transition from MIC status encompasses recognising that established institutions and procedures, however successful in the past, may not be sufficient to maintain the momentum to the next level.
Two perspectives on AGOA: Renew the Africa trade pact (Bloomberg View), Former envoy misses crux of poultry dispute (Business Report)
Tanzania awards $9 bln rail projects to Chinese companies (Reuters)
Tanzania has awarded contracts to build new railway lines worth about $9 billion to Chinese firms, its transport minister said, expanding Beijing's presence in East Africa's second-biggest economy. Transport Minister Samuel Sitta told parliament on Saturday a Chinese consortium had been awarded a contract to build a 2,561 km (1,536 miles) standard gauge railway connecting Dar es Salaam port to land-locked neighbours at a cost of $7.6 billion.
EAC to set up authority to push for free, fair trade (The EastAfrican)
A regional body to be charged with enforcing laws that protect and promote free and fair competition among businesses with cross-border presence will be operational as from June. The EAC Secretariat is in the final stages of setting up the organisational structure of the EAC Competition Authority, to be headed by a board of commissioners – one from each of the EAC partner states. Other sections are the Office of the Registrar, Directorate of Mergers and Acquisitions, Directorate of Monopolies and Cartels, Directorate of Consumer Protection and Directorate of Corporate Affairs.
EAC: communique of the emergency summit on Burundi
Uganda: Foreign contractors to sit the English tests (New Vision)
Foreign contractors interested in taking up the construction of infrastructure in Uganda like roads, power dams among others will be required to pass the English test before they can be given the contract. The move will ease communication at a time of inspection by government officials who speak English as the official language while most contractors cannot fully express themselves in English. This was revealed by the minister of works, John Byabagambi, in a meeting between contractors and manufactures of suppliers of steel and cement, organized by the Uganda Manufacturers Association (UMA).
Five secrets of success of Sub-Saharan Africa’s first road PPP (World Bank Blogs)
Why is Senegal’s Dakar-Diamniadio toll road, which opened on time and on budget in August 2013, so successful? The road has dramatically improved urban mobility around Dakar, reducing commute times between the city and its suburbs from two hours to less than 30 minutes. Building on this positive experience, in 2014 the Government of Senegal awarded a further concession to extend the motorway to connect it to Dakar’s new Blaise Diagne International Airport. Excluding South Africa, this is the first greenfield road PPP in sub-Saharan Africa. What lessons can we draw?
Make in India: which exports can drive the next wave of growth? (IMF)
This paper breaks new ground in analyzing India’s exports by the technological content, quality, sophistication, and complexity of the export basket. We identify five priority areas for policies: (1) reduction of trade costs, at and behind the border; (2) further liberalization of FDI including through simplification of regulations and procedures; (3) improving infrastructure including in urban areas to enhance manufacturing and services in cities; (4) preparing labor resources (skills) and markets (flexibility) for the technological progress that will shape jobs in the years ahead; and (5) creating an enabling environment for innovation and entrepreneurship to draw the economy into higher productivity activities.
David Dollar: 'What institutions do Asian countries need to keep growing?' (East Asia Forum)
Peter Drysdale: 'Will Asia’s growth fizzle out?' (East Asia Forum
The Pacific Trade and Development (PAFTAD) conference series
President Muhammadu Buhari: inaugural speech (APC)
Adeyeye Adebajo: 'Only Nigeria can fulfil the West African dream' (Business Day)
The real dangers of EPA to ECOWAS — Ukaoha (Vanguard)
Myles Wickstead: 'The future of development - aid and beyond' (UNU-WIDER)
Taming the dollar as regional currencies take a beating (The EastAfrican)
Rwanda: IMF completes third PSI Review (IMF)
BoB rejects Russian bank licence application (Mmegi)
Why Africa must keep an eye on new US, EU trade bloc (Business Daily)
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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EAC to set up authority to push for free, fair trade
A regional body to be charged with enforcing laws that protect and promote free and fair competition among businesses with cross-border presence will be operational as from June.
The EAC Secretariat is in the final stages of setting up the organisational structure of the EAC Competition Authority, to be headed by a board of commissioners – one from each of the EAC partner states.
Other sections are the Office of the Registrar, Directorate of Mergers and Acquisitions, Directorate of Monopolies and Cartels, Directorate of Consumer Protection and Directorate of Corporate Affairs.
A total of $701,530 has been set aside in the 2015/2016 financial budget to operationalise the Authority.
According to Peter Kiguta, the EAC Director-General of Customs and Trade, the partner states have already nominated the commissioners who will work on ad hoc basis.
“The office will have five members made up of the chief registrar, two deputies and advisors,” said Mr Kiguta.
EAC trade ministers have directed partner states to confirm their nominees for the posts of commissioners by July 15.
The Competition Authority is expected to control or eliminate restrictive measures on companies seeking to invest in other partner states, and control mergers and acquisitions as well as the abuse of dominant positions of market power in East Africa.
It is expected that with the regional authority in place, small and medium enterprises will be shielded from anti-competitive practices.
Monopolies or firms with a large market share abuse their dominance in different ways including engaging in price fixing, sharing of markets and compromising on quality of product to the detriment of consumers.
Parallel bodies
However, the challenge is the existence of a parallel regional competitions authority — that of the Common Market for Eastern and Southern Africa (Comesa) – of which the East African countries except Tanzania are members. For example, conflicting rules in resolving cross-border issues are likely to play out, as well as making the decision on which authority to approach when a dispute arises.
“The main problem with the Comesa Competitions Authority is the high merger fee set for companies in the region,” said Wang’ombe Kariuki, Director-General of the Competition Authority of Kenya.
The Comesa Secretariat last year revised its rules which now require companies looking to expand through acquisitions, and having a combined turnover of $5 million, to pay a $500,000 fee.
“The EAC Competitions Authority should set the merger fee based on the cost and not the revenue generation,” said Mr Kariuki.
Mr Kiguta said partner states that are signatories to both Comesa and EAC will have the freedom to choose which authority to approach based on the nature of the dispute at hand.
“We hope that by 2017 we shall have one competition authority – the Tripartite Competition Authority – to stem from the soon-to-be launched Tripartite Free Trade Area,” he said.
In an effort that will ensure that the regional authority is successful in delivering its mandate, the Council of Ministers has adopted the EAC Competition (Amendment) Bill 2015, which has a provision for a mechanism for eliminating counterfeiting and piracy in the region, promoting fair trade and ensuring consumer welfare as well as establishing the East African Community Competition Authority.
According to Mr Kiguta, the EAC Competition Bill will consider the member states’ existing laws and policies.
“It will address competition issues across the region while the national laws will be used for enforcement,” said Mr Kiguta.
EAC member states will be expected to accord national competition authorities a legal mandate to co-operate with international, regional and national agencies in matters germane to the Competition Bill.
Tanzania, Rwanda, Burundi and Kenya have competition laws in place while Uganda has a draft law.
Andrew Luzze, the executive director of the East Africa Business Council, said under its advocacy mandate, the EAC Competition Authority will give general advice on competition matters to national competition authorities and the partner states.
“This mandate will spawn positive economic benefits to the region,” said Mr Luzze.
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South Africa: Merchandise Trade Statistics April 2015
The South African Revenue Service (SARS) has released trade statistics for April 2015 that recorded a trade deficit of R2.51 billion. This figure includes trade data with Botswana, Lesotho, Namibia and Swaziland (BLNS).
Including BLNS
The R2.51 billion deficit for April 2015 is due to exports of R84.01 billion and imports of R86.53 billion. Exports decreased from March 2015 to April 2015 by R6.84 billion (7.5%) and imports decreased from March 2015 to April 2015 by R4.34 billion (4.8%). The cumulative deficit for 2015 is R35.83 billion compared to R39.82 billion in 2014.
Trade highlights by category
The month-on-month export movements:
R’ million
|
|
|
Section:
|
Including BLNS:
|
|
Vehicle & Transport Equipment
|
- R2 536
|
- 21.2%
|
Machinery & Electronics
|
- R1 683
|
- 18.1%
|
Base Metals
|
- R1 669
|
- 14.5%
|
Precious Metals & Stones
|
- R 961
|
- 5.6%
|
Mineral Products
|
+ R1 124
|
+ 6.5%
|
The month-on-month import movements:
R’ million
|
|
|
Section:
|
Including BLNS:
|
|
Vehicle & Transport Equipment
|
- R2 378
|
- 21.1%
|
Mineral Products
|
- R1 419
|
- 9.0%
|
Textiles
|
- R 627
|
- 18.2%
|
Equipment Components
|
- R 452
|
- 6.3%
|
Machinery & Electronics
|
+ R1 304
|
+ 6.1%
|
Trade highlights by world zone
The world zone results from March 2015 to April 2015 are given below.
Africa:
Exports: R25 538 million – this is a decrease of R 512 million from March 2015
Imports: R8 205 million – this is a decrease of R2 894 million from March 2015
Trade surplus: R17 333 million
This is a 15.9% increase in comparison to the R14 950 million surplus recorded in March 2015
America:
Exports: R8 484 million – this is a decrease of R 609 million from March 2015
Imports: R8 483 million – this is a decrease of R1 933 million from March 2015
Trade surplus: R 1 million
This is an improvement in comparison to the R1 323 million deficit recorded in March 2015
Asia:
Exports: R23 897 million – this is a decrease of R2 873 million from March 2015
Imports: R39 360 million – this is an increase of R 139 million from March 2015
Trade deficit: R15 463 million
This is a 24.2% increase in comparison to the R12 451 million deficit recorded in March
Europe:
Exports: R18 589 million – this is a decrease of R2 910 million from March 2015
Imports: R29 026 million – this is an increase of R 129 million from March 2015
Trade deficit: R10 438 million
This is a 41.1% increase in comparison to the R7 398 million deficit recorded in March 2015
Oceania:
Exports: R 982 million – this is a decrease of R 109 million from March 2015
Imports: R1 254 million – this is an increase of R 200 million from March 2015
Trade deficit: R 272 million
This is a decrease compared to the R 37 million surplus recorded in March 2015
Excluding BLNS
The trade data excluding BLNS for April 2015 recorded a trade deficit of R11.11 billion. This is a result of exports of R73.26 billion and imports of R84.37 billion. Exports decreased from March 2015 to April 2015 by R5.75 billion (7.3%) and imports decreased from March 2015 to April 2015 by R3.70 billion (4.2%). The cumulative deficit for 2015 is R68.94 billion compared to R72.42 billion in 2014.
Trade highlights by category
The month-on-month export movements:
R’ million
|
|
|
Section:
|
Excluding BLNS:
|
|
Vehicles & Transport Equipment
|
- R2 208
|
- 21.1%
|
Base Metals
|
- R1 561
|
- 14.7%
|
Machinery & Electronics
|
- R1 374
|
- 18.4%
|
Mineral Products
|
+ R 803
|
+ 5.1%
|
Chemical Products
|
+ R 751
|
+ 16.2%
|
The month-on-month import movements:
R’ million
|
|
|
Section:
|
Excluding BLNS:
|
|
Vehicles & Transport Equipment
|
- R2 375
|
- 21.1%
|
Mineral Products
|
- R1 411
|
- 8.9%
|
Textiles
|
- R 559
|
- 18.1%
|
Equipment Components
|
- R 452
|
- 6.3%
|
Machinery & Electronics
|
+ R1 336
|
+ 6.3%
|
Trade highlights by world zone
The world zone results from March 2015 to April 2015 are given below.
Africa:
Imports: R6 051 million – this is a decrease of R2 260 million from March 2015
Trade surplus: R8 733 million
BLNS (only)
Trade statistics with the BLNS for April 2015 recorded a trade surplus of R8.60 billion.
The surplus is a result of exports of R10.75 billion and imports of R2.15 billion. Exports decreased from March 2015 to April 2015 by R1.09 billion (9.2%) and imports decreased from March 2015 to April 2015 by R0.63 billion (22.7%). The cumulative surplus for 2015 is R33.11 billion compared to R32.60 billion in 2014.
Trade Highlights by Category
The month-on-month export movements:
R’ million
|
|
|
Section:
|
BLNS:
|
|
Vehicles & Transport Equipment
|
- R 328
|
- 22.0%
|
Machinery & Electronics
|
- R 309
|
- 17.1%
|
Precious Metals & Stones
|
- R 305
|
- 41.5%
|
Base Metals
|
- R 108
|
- 12.1%
|
Mineral Products
|
+ R 321
|
+ 18.6%
|
The month-on-month import movements:
R’ million
|
|
|
Section:
|
BLNS:
|
|
Precious Metals & Stones
|
- R 282
|
- 57.6%
|
Chemical Products
|
- R 144
|
- 27.0%
|
Textiles
|
- R 68
|
- 19.1%
|
Prepared Foodstuff
|
- R 40
|
- 10.6%
|
Miscellaneous Manufactured Articles
|
+ R 3
|
+ 14.4%
|
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High-Level Meeting on the Follow-up to the Second United Nations Conference on Landlocked Developing Countries
The Zambian Government together with the United Nations Office of the High Representative for Least Developing Countries, Landlocked developing Countries and Small Island Developing States (UN-OHRLLS) and development partners will from 2nd to 4th June 2015 hold a three day follow-up meeting to The Second United Nations Conference on Landlocked Developing Countries (LLDCs) that was held in Vienna, Austria in November 2014. The meeting will follow up on the outcome of the conference, the Vienna Programme of Action for the LLDCs for the Decade 2014-2024 (VPoA), which was adopted by all member states during the Conference.
The Conference held in Vienna brought together high-level officials from 129 UN Member States, including Heads of State and Government, Ministers, other officials, private sector representatives, academia and civil society representatives as well as representatives from the UN system and other international organizations to reaffirm the global commitment to addressing the special development needs of and the challenges faced by the LLDCs.
The United Nations General Assembly on 12 December 2014 further decided to endorse the Vienna Programme of Action for the LLDCs for the Decade 2014-2024 and the Vienna Declaration in resolution 69/137. The Vienna Programme of Action is a holistic and results-oriented programme succeeding the Almaty Programme of Action (APoA) as the development blueprint for LLDCs for the next decade. It comprises of an overarching goal, six specific goals as well as time bound specific objectives in six priority areas. The six priority areas are: 1) fundamental transit policy issues, 2) infrastructure development and maintenance, 3) international trade and trade facilitation, 4) regional integration and cooperation, 5) structural economic transformation and 6) means of implementation. The priority areas include 21 specific objectives and 87 actions to be undertaken by LLDCs, transit developing countries and development partners to help ensure the achievement of the goals of the Vienna Programme of Action.
The overarching goal of the VPoA is to address the special development needs and challenges of LLDCs in a more coherent manner and thus contribute to an enhanced level of sustainable and inclusive growth and eradication of poverty for the more than 450 million people in the 32 LLDCs. The VPoA reflects a deeper understanding of the challenges that LLDCs face and calls for enhancing international trade performance, trade facilitation, productive capacities, economic diversification and value-addition, enhanced regional integration and cooperation, and collaboration with vibrant private sector based on expanded partnerships.
The VPoA has six specific goals namely: (a) to promote unfettered, efficient and cost-effective access to and from the sea by all means of transport, on the basis of the freedom of transit, and other related measures, in accordance with applicable rules of international law; (b) to reduce trade transaction costs and transport costs and improve international trade services through simplification and standardization of rules and regulations, so as to increase the competitiveness of exports of LLDCs and reduce the costs of imports, thereby contributing to the promotion of rapid and inclusive economic development; (c) to develop adequate transit transport infrastructure networks and complete missing links connecting LLDCs; (d) to effectively implement bilateral, regional and international legal instruments and strengthen regional integration; (e) to promote growth and increased participation in global trade, through structural transformation related to enhanced productive capacity development, value addition, diversification and reduction of dependency on commodities; and (f) to enhance and strengthen international support for LLDCs to enable them to meet challenges arising from landlockedness in order to eradicate poverty and promote sustainable development.
While the APoA focused principally on fundamental transit policy issues, infrastructure development and maintenance and international trade, the VPoA has not only reinforced and expanded these areas, it has also included three new priorities, namely regional integration and cooperation, structural economic transformation and means of implementation.
The adoption of the Vienna Programme of Action is reflective of the solidarity, understanding and spirit of cooperation and collaboration among all stakeholders in supporting LLDCs to achieve sustainable development. The VPoA demonstrates the renewed and strengthened partnerships between LLDCs, their transit neighbours and their development partners, while also calling for strengthened partnerships within the context of South-South and triangular cooperation and partnerships with private sector. The successful implementation of this expanded Programme of Action will require not only renewed and strengthened partnerships between LLDCs, transit countries and development partners, but also enhanced support and partnership efforts with relevant international and regional organizations, between private and public sectors and stronger and widened North- South and South-South cooperation.
The priority area on means of implementation recognizes the efforts made by LLDCs to mobilize domestic resources and its importance for the effective implementation of the VPoA. At the same time, ODA continues to be a major source of external financing for many LLDCs. Given the low level of integration with the global community, Aid for Trade in particular also plays a key role in supporting the development of trade-related infrastructure, formulation of trade policies, implementation of trade facilitation measures and capacity-building. Targeted financial and technical support from development partners, as well as capacity building support from UN system and other international organizations will be critical for the successful implementation of the specific actions of the VPoA, , complementing LLDCs’ own efforts. In addition, South-South and triangular cooperation, as a complement to North-South cooperation, and the private sector, including through foreign direct investment, also have particular roles to play in contributing to the development of LLDCs.
In terms of implementation, follow-up and monitoring, the VPoA calls for actions at national, subregional, regional and global levels reinforced through mutual accountability at all levels and all actors. The monitoring and review process envisages the involvement of all relevant stakeholders, including the private sector, at all levels.
At the national level, Governments are invited to mainstream the VPoA into their national and sectoral development strategies for its effective implementation. At the subregional and regional level, monitoring and review is envisaged through existing intergovernmental processes, while inviting regional and subregional organizations, including regional economic communities, regional development banks and UN regional Commissions to mainstream the implementation of the VPoA into their relevant programmes. Similarly, at the global level, the governing bodies of organizations within the United Nations system are invited to mainstream the implementation of the Programme into their programme of work, and to conduct sectoral and thematic reviews, as appropriate.
With the adoption of such a comprehensive and results-oriented Programme of Action, the new and challenging phase ahead is one of ensuring that the deliverables in favour of LLDCs lead to concrete actions. LLDCs concerns and their special needs deserve special attention in the post-2015 development agenda and should be adequately integrated into the goals, targets and indicators. The Vienna Programme of Action and its implementation can provide important recommendations into the final outcomes of this process, as well as other global process such as the financing for development process.
In this context, the Government of Zambia as the Chair of the Group of LLDCs has offered to host a highlevel meeting on the follow-up to the Second UN Conference on LLDCs in Livingstone, Zambia on 2nd to 4th June 2015. The meeting will be organized by the Government of Zambia and UN-OHRLLS, in partnership with other stakeholders.
Objectives of the meeting
A clear strategic direction and consistent and coherent engagements are necessary in order to strengthen partnerships. We also need to consolidate the active involvement of all stakeholders and their sense of ownership, drawing from what we have achieved during the Conference process, in order to ensure that the specific goals and objectives of the Vienna Programme of Action are effectively translated into actions and results. A roadmap for the implementation of the VPoA is needed for the purpose of guiding the LLDCs, transit developing countries and their development partners as well as other stakeholders on a path of a coordinated and effective implementation of the VPoA.
In addition, it is necessary to conceptualize the way forward in terms of monitoring and reporting on the implementation of the VPoA. In this regard, the VPoA requests OHRLLS to develop, in collaboration with other relevant stakeholders, indicators for measuring the progress on its implementation in LLDCs.
It is in this broad context that the meeting is being organized. The meeting is expected to provide a platform for sharing of best practices, experiences and initiatives, come up with concrete recommendations on the follow-up actions on the implementation of the VPoA and a shared framework/system of indicators for monitoring the VPoA. This will be the first major meeting since the adoption of the Vienna Programme of Action in November 2014. Since it is being organized shortly before the Financing for Development Conference in July 2015 and the UN Summit in September 2015 which will adopt the post-2015 development agenda, the meeting will also aim to establish linkages with these global processes.
The specific objectives of the meeting are to:
-
Review and identify opportunities and bottlenecks in LLDCs in terms of implementation in the priority areas of the VPoA
-
Provide a platform for sharing of best practices, experiences and initiatives at the national, regional and global levels in the priority areas of the VPoA
-
Discuss and conceptualize the way forward in implementing the VPoA, including the implementation strategy, tools and indicators for measuring the progress in implementation of the VPoA
-
Strengthen and forge partnerships and ownership of the VPoA at both regional and national levels
Format
The meeting will be held over the period of three days in Livingstone, Zambia from 2nd to 4th June 2015. It will consist of a number of sessions focusing on the priority areas of the Vienna Programme of Action and on the way forward in their implementation. Each session will feature a number of panellists from the UN system and other international organizations, representatives from governments, as well as the private sector, followed by interactive discussion. The presentations or statements will focus either on reviewing the current situation in LLDCs or showcasing best practices, experiences and strategies for effective implementation.
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Largest Free Trade Area set for launch
Preparations to launch the Grand Free Trade Area that will bring together half of the African continent into one common market are complete. The momentous occasion will take place on 10 June 2015 at the Egyptian resort city of Sharm El Sheikh during the 3rd Summit of the Tripartite Heads of State and Governments.
The Tripartite consists of 26 States that are members of the Common Market for Eastern and Southern Africa (COMESA) the East African Community (EAC) and the Southern Africa Development Community (SADC).
The Tripartite Free Trade Area (FTA) will be the largest economic bloc on the continent with a combined population of 625 million people and a Gross Domestic Product (GDP) of USD 1.2 trillion. It will account for half of the membership of the African Union and 58% of the continent’s GDP. The launch of the Tripartite will set the stage for the establishment of the Continental Free Trade Area (CFTA) in 2017.
Technical teams that have been working on the TFTA negotiations start arriving at the venue from 5th June 2015 for the pre-summit meetings that will prepare the ground for the launch. They include the Tripartite Committee of Senior Officials and the Council of Ministers whose meetings will take place on 7 and 8 June respectively. They will prepare the launch documents including the Tripartite Free Trade Area Agreement, the Declaration launching Phase II of the negotiations for the TFTA and the Roadmap.
The Tripartite Heads of State and Government will append their signatures on the documents on 10 June 2015 and thereafter issue a Communique.
The decision to establish the COMESA-EAC-SADC TFTA was mooted in 2008 mainly to overcome the challenges posed by the overlapping membership of the three RECs especially in the regional trade. This was followed by the launching of the negotiations for the FTA in 2011 by the Heads of State who also set a time-frame of up to 2014 to complete the process.
The negotiations focused on trade in goods which have now been concluded thus paving way for the launch. Negotiations on trade in services and other trade-related areas such as competition policy and intellectual property rights are set to begin soon after the launch of the FTA on trade in goods. The Tripartite Trade Negotiations Forum (TTNF) was the negotiating body assisted by four Technical Working Groups (TWGs). The other was the Technical Committee of Senior Officials (TSCO).
The Secretary Generals of the three RECs comprise the Tripartite Task Force (TTF) which provided the stewardship of the negotiations process under the chairmanship of Secretary General of COMESA, Mr Sindiso Ngwenya who took over the mantle in June 2014.
The decision to conduct the forthcoming launch of the Tripartite FTA was made after the majority of the Tripartite Member/Partner States made ambitious tariff offers and agreed on Rules of Origin to be applied in the interim whilst further work continued on product specific Rules of Origin. This was during the Tripartite Sectoral Committee of Ministers meeting in Bujumbura, Burundi in October 2014.
The Tripartite FTA offers significant opportunities for business and investment within the Tripartite and will act as a magnet for attracting foreign direct investment into the Tripartite region. The business community, in particular, will benefit from an improved and harmonized trade regime which reduces the cost of doing business as a result of elimination of overlapping trade regimes due to multiple memberships.
The launching of the Tripartite Free Trade Area is the first phase of implementing a developmental regional integration strategy that places high priority on infrastructure development, industrialization and free movement of business persons.