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Africa seeks super banker to manage economic frontier
Eight candidates are vying to become the next head of the strategic African Development Bank as the continent is undergoing an economic transformation.
With 80 shareholders – 54 African states and 26 non-African countries – set to vote on Thursday, it is difficult to predict who will succeed Rwandan Donald Kaberuka, bank chief for two consecutive terms since 2005.
The new super banker will take over an AfDB seeking to diversify beyond its traditional role as a development bank, which lends money for major projects – a total of $6.8 billion for 317 operations in 2013.
Today despite multiple conflicts, health crises such as Ebola, and staggering poverty, Africa is seen as “a new frontier in world economic growth,” Amethis investment fund founder Luc Rigouzzo told AFP.
He noted that the continent’s gross domestic product had doubled since the year 2000 to $2 trillion (1.8 trillion euros). In an OECD-led report released Monday, economists predicted the overall African economy would expand by 4.5 per cent this year.
In this new frontier, shareholders in the Abidjan-based bank might, for the first time pick a woman, Cristina Duarte, Cape Verde’s finance minister, who would also be the first Portuguese speaker to run the bank.
Other contenders include Akinwumi Adesina from Nigeria, which rivals South Africa as an investors’ favourite despite fighting a six-year insurgency by Boko Haram Islamists in the country’s north.
However, a win by Adesina, Nigeria’s outgoing agriculture minister, would break an unwritten rule that regional heavyweight countries should not run the AfDB.
PLAY KEY ROLE
The candidates from Francophone African countries are Mali’s Birama Sidibe, an expert in development, Tunisia’s ex-finance chief Jalloul Ayed and Bedoumra Kordje, current finance minister in Chad, who if chosen would become the AfDB’s first president from central Africa.
Ethiopian finance minister Sufian Ahmed, Sierra Leone’s foreign minister Samura Kamara and former AfDB vice president Thomas Sakala of Zimbabwe round out the list.
Foreign investors will likely play the role of kingmaker in choosing the next AfDB chief.
The United States – the AfDB’s second-biggest shareholder after Nigeria – will have a central role in the vote, as will Japan and China.
France wants a bank president who is “more concerned about the interests” of Francophone Africa, says the finance ministry.
But analysts say Western powers need to take a new view of Africa.
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Association urges implementation of ECOWAS Common Tariff to boost regional trade
The National Association of Nigerian Traders (NANTS) has called for the implementation of the ECOWAS Common External Tariff (CET) to boost regional trade among member countries.
Its National Secretary, Mr Ken Ukaoha, made the call in an interview with the News Agency of Nigeria (NAN) on Tuesday in Abuja.
He said that the non-implementation of the common tariff could lead to the disorganisation of the region.
Ukaoha stressed the need to put necessary measures to ensure its implementation.
“The Common External Tariff, if implemented, can help the region to grow; it can also help in achieving the distribution and redistribution of wealth across the region.
”It can also work towards fast tracking poverty reduction, because you are creating jobs for the people.
“It can also guarantee and help or assist consumer choice; and most importantly, it will help member countries come together and do things as one; it is an open door to common market operations in the region.
“However, if you don’t implemented very well, it can also lead to disorganisation of the region and disappearance of ECOWAS.
“There must be some level of carefulness in the implementation of the CET, the enforcement of the laws, because we are porous, so that we do not allow third parties to benefit, while we lose and then we become a dumping ground, our industries will stifled and die away.
“There must be constant monitoring of the impact of the CET on the economy; the future is watching, history is waiting.”
According to him, before CET, there have been laws and other protocols which have not been able to promote trade in the region.
“ECOWAS has all the necessary legal tools for trade and integration; talking about these laws and protocols, you will find out that we have, before the CET, laws that are able to move businesses round and laws that are able to facilitate business transactions within and across the region.
“Unfortunately, West Africa has still been revolving between 10 per cent and 12 per cent of internal trade.
“CET was adopted last year and implementation started from that year, it is not clear yet how many countries have implemented this and to what extent they are implementing now as it is.
“But I would say that ECOWAS has done a good job by promoting the Common External Tariff adoption because we need to look inwards.’’
The CET was inaugurated by Heads of States and Governments of ECOWAS member countries for West African nations in 2014.
It is a basic feature of the customs union as a form of economic integration whereby all countries are expected to discard their individual tariff structure with which they trade with third countries.
With CET, the same customs duties, import quotas, preferences or other non-tariff barriers to trade apply to all goods entering the area, regardless of which country within the area they are entering.
All 16 countries within the ECOWAS are expected to commence the implementation of a uniformed tariff on imports which was expected to take effect from January, 2015.
The tariff, set at 35 per cent at most, is expected to modify the rights and obligations of ECOWAS member countries under the CET.
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tralac’s Daily News selection: 26 May 2015
The selection: Tuesday, 26 May
Featured report: African Economic Outlook 2015
Economic Outlook - five thematic chapters
The chapter, Trade policies and regional integration in Africa, also examines the link between regional integration and spatial economic development, highlighting the impact of integration on industry location in Africa. Regional integration also generates spatial development, and regional institutions play a key role promoting spatial development and inclusion. Regional integration should help spread the gains from closer ties to a wider number of countries and regions. The key observations are intended to help policy makers focus on this, especially the need to help least developed and landlocked countries.
Regional development and spatial inclusion - three thematic chapters
Adopting a place-based approach will help policy makers articulate sectoral policies more effectively for structural transformation. This chapter proposes a seven-step methodology to crafting development strategies, stressing four main areas of improvement: designing informed policies through better statistics; defining integrated strategic priorities through regional foresight studies; building capacity at multiple levels of government; and mobilising adequate financing for regional economic development at both local and national levels.
Country notes: Each profile includes synopses of the overall state of the country, recent economic developments, macroeconomic policy, structural issues, the political and social context, human development, one sector relevant to development and vital country statistics. [Statistics]
Gender Equality Index for Africa: launched yesterday in Abidjan (AfDB)
The @AfDB_Group has invested $32bn across Africa (@AfDB_Dominic)
Intra African trade as % of total trade by that regional grouping (@prepaid_africa)
Ethiopia, Nigeria, Zimbabwe in tight race to become new AfDB chief; battle could break 'unwritten' rules (Mail & Guardian Africa)
Bank to the future: new era at the AfDB (Africa Research Institute)
India signs replenishment of technical cooperation agreement with African Development Bank Group
On Africa Day, UN chief spotlights continents’ achievements, reflects on challenges of 2015 (UN News Centre)
African countries to stand up to mega-trading blocs (Commonwealth Secretariat)
Senior officials and experts will meet to consider the future of African trade in light of the emergence of mega-trading blocs which exclude more than 160 countries from regional trade negotiations. The meeting organised by the Commonwealth Secretariat in collaboration with the International Institute for Sustainable Development will take place in Nairobi from 26 to 27 May 2015. Participants will look at ways to ensure the trade interests of African countries are taken into account at global and regional levels. The Commonwealth Secretariat will present the first draft of its Policymakers Handbook on Regionalism and Mega-Trading Blocs at the meeting.
Kenya: Business reforms key to new Africa growth (Business Daily)
Africa enters its 20th consecutive year of economic expansion, with the World Bank forecasting that the region’s GDP growth will remain steady at 5.1% through to 2016. Africa’s collective GDP is now roughly equal to Brazil’s or Russia’s, and the continent is among the world’s most rapidly growing economic regions. While today we are one of the fastest growing economies in the world, others are apprehensive about whether our steadily expanding economy is sustainable and inclusive. Creating an enabling environment for business through instituting legal and regulatory reforms is critical to realising Kenya’s goal of sustainable industrialisation and inclusive growth. [Commentary by Adan Mohamed, Kenya’s Cabinet Secretary of Industrialisation, Enterprise and Development]
Kenya: Budget office differs with State on 2015 economic growth projections (The Standard)
The Parliamentary Budget Office has dismissed the Government’s projections on this year’s economic growth, becoming the first public body to poke holes in Kenya’s prospects. “A GDP growth estimate of 7.0 per cent in 2015 is unlikely to be met due to exogenous shocks, such as inadequate rainfall and the weak outlook of global economy. It is our considered opinion that the economy will grow by 5.6 per cent in 2015, rising to 6.0 per cent in the medium term,” the report notes.
Kenya: Import costs set to rise as shilling hits new three-year low (Business Daily)
AfDB 2015 economic outlook gives East Africa best growth prospects (New Times)
Regional body tips Tanzania as next EA economic powerhouse (Daily News)
Tanzania has high potential to become the economic powerhouse in the East African region given her natural wealth and strategic geographical positioning, but there are challenges to overcome before it can realise its potential. This is the observation of the TradeMark East Africa, Chief Executive Officer, Frank Matsaert whose organisation is assisting East African Community (EAC) member states, Tanzania, Kenya, Uganda, Rwanda and Burundi to promote trade and integration.
TMEA’s second country programme is expected to begin in 2017 after the expiry of the current programme, whose main highlights include the 593 million US dollar modernisation project of the Dar es Salaam port it partnered with the World Bank and the British Department of International Development. He said they would also focus on activities to improve cross border trade and continue with improving capacity of institutions dealing with regional integration.
Zimbabwe: Platinum weighs down trade figures (The Herald)
Zimbabwe’s trade deficit with key trading partners continues to grow after the country’s exports for April declined to $185,9 million from $188,7 million recorded in the prior month, latest Zimstat data has shown. The drop was mainly due to the decline in mineral exports after mining companies’ suspended exports in April following the introduction of the 15 percent levy on un-beneficiated minerals. For April 2015, Zimbabwe’s total exports were valued at $185,9m, while the country’s imports were $465,8m leading to a deficit of $279,9m. Total imports for the first four months of the year stood at $2,03bn against exports for the same period of $902,4 million.
South Africa GDP growth slows to 1.3% as manufacturing slumps (Bloomberg)
South Africa’s economy, the continent’s second-largest, grew at a slower pace in the first quarter as power outages curbed manufacturing output and farming output contracted. Gross domestic product rose an annualized 1.3% from the previous quarter, when it expanded 4.1%, the statistics office said in a report released in Cape Town on Tuesday. The median estimate of 19 economists in a Bloomberg survey was 1.5%. Manufacturing fell an annualized 2.4% in the first quarter and agricultural output contracted 16.6%, the statistics office said. Mining rose 10.2%, while financial services expanded 3.8%.
Trading in chaos (Greenpeace Africa)
In its new report published today, Trading in Chaos, Greenpeace Africa reveals the findings of two years of investigations into the operations both at home and abroad of one of the key players in the DRC logging chaos, Lebanese-owned Cotrefor. The results are a depressing cocktail of unpaid taxes, shocking mistreatment of employees, rampant irregularities in operational procedure and exceeding allocated quotas of the endangered tree species Afrormosia that are permitted to be logged.
High freight and storage costs hurting regional trade, say shippers (Daily Nation)
An audit conducted by the Shippers Council of Eastern Africa on companies drawn from a cross-section of segments has revealed where the traders go wrong in logistics leading them to incur huge losses that could otherwise be easily avoided. According to the Pilot logistics survey report, most companies have not implemented a fully integrated logistics system. The firms mostly focus more on third-party agencies to run their transportation and warehousing necessities.
UK pledges further support towards port of Mombasa (TradeMark East Africa)
DHA grants reprieve for SADC direct-transit pax (SA Tourism Update)
South Africa’s neighbouring countries have breathed a “cautious” sigh of relief as the Department of Home Affairs has revealed that no supporting documents – including an unabridged birth certificate – will be needed for travellers under 18, who are in direct international transit, passing through SA’s international airports. Neighbouring countries have been bracing for the impact that the new South African immigration regulations for minors could have on their tourism industries, as South Africa is an important feeder hub into the SADC region.
Mozambique is African Number 5 in FDI: most of the US$9bn went to real estate projects
In Mozambique, where the International Monetary Fund estimates a 7% growth this year, US$9bn in capital investments was received last year, the majority of which was devoted to real estate, a sector driven by the plans to build over a dozen shopping centres by Belgian company Pylos and by the investment projects of African company Atterbury Property Developments in the cities of Beira, Pemba and Nacala
Botswana: Millers warn phasing out wheat import levy will flood market with imports (Sunday Standard)
Government is bracing for a backlash following the announcement of a reduction in wheat levy, which local millers believe will contribute to dumping and in the long run kill the domestic economic diversification drive. The Ministry of Trade has decided to phase out the 15 percent wheat levy over a period of 10 years—a move that has irked the Maize and Wheat Millers Association (MWMA) and Botswana Bakers Association. The position of the two is that the levy should be retained to protect local millers from dumping.
Nigeria loses over $2bn annually to smuggled poultry products (ThisDay)
The national president of the Poultry Association of Nigeria, Dr. Ayoola Oduntan, explained that over 1.2m tonnes of smuggled poultry products, which are mainly frozen chicken and turkey, has continued to impact negatively on poultry farmers in the country. He warned that the industry is also threatened by the negative of the Economic Partnership Agreement (EPA) and the introduction of the Common External Tariff discouraging local production.
Tunisian, Nigerian manufacturers to explore trade opportunities (ThisDay)
Regional co-operation on taxation: avoiding harmful tax competition (New Era)
Recently, SADC drafted guidelines for tax incentives and indirect taxes that are expected to be presented at the next Committee of Ministers’ meeting scheduled for next month. If adopted by the committee, it will be in the discretion of member states to implement these guidelines domestically.
It was noted that the current initiatives to ensure that ex-miners received their benefits involved a number of countries in the SADC region. As such it was important to establish a regional mechanism at the SADC level for cross border remittances of benefits for migrant workers. Furthermore, stakeholders were encouraged to explore areas of synergy on other regional processes and initiatives such as the SADC TB programme in Mining. At a regional level, Ms Phiri noted that, the Regional Indicative Strategic Development Plan (2015-2020) recognised ex-miners challenges and as a result it was hoped that the SADC Cross Border Portability Instrument for Social Protection will be implemented by 2018.
Safety nets in Africa (World Bank)
Safety Nets in Africa presents the rationale for targeting safety net programs to households that are chronically food insecure or vulnerable to food insecurity. Seven case studies (Cameroon, Ghana, Kenya, Malawi, Mozambique, Niger, and Senegal) are then presented that document a variety of approaches and experiences in country targeting efforts, taking into account country needs and existing programs. [Download]
The politics of redistributive transfers (GIGA)
JK reconvenes EAC summit on Burundi (The Citizen)
Joint statement by EAC-COMESA, ICGLR, AU and UN on the situation in Burundi
Burundi crisis threat to EA stability, says COTU boss
High hopes on GM maize targeted at Mozambique's droughts, diseases (Club of Mozambique)
Trade lobby warns horticulture sector under threat over new EU rules (The Standard)
Reliance on trade makes food systems vulnerable (ScviDev)
Tanzania: Noni retires as chair of continental financing body, AADFI (Daily News)
TRA clears South African firm of misconduct (Daily News)
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)
Africa: making growth more inclusive hinges on unlocking potential of local economies, says the African Economic Outlook 2015
Continent should capitalise on youth, develop rural-urban trade corridors
With Africa’s population set to triple by 2050, modernising local economies will be vital to make the continent more competitive and to increase people’s living standards, according to the African Economic Outlook 2015, released at the African Development Bank Group’s 50th Annual Meetings.
Surpassing most regions in spite of the global financial crisis, African economies will grow by 4.5 per cent in 2015 and may reach 5 per cent in 2016, converging with Asia’s current growth rates. However, lower oil and commodity prices, uncertain global conditions, the consequences of the Ebola outbreak in West Africa and domestic political uncertainties could delay an expected return to pre-2008 levels of growth.
Foreign direct investment (FDI) is forecasted to reach USD 73.5 billion in 2015, underpinned by increasing greenfield investment from China – which remains Africa’s largest trade partner after the European Union. The report also shows an increase in intra-African and outward FDI flows. South African companies are the leading investors on the continent.
“African countries have shown considerable resilience in the face of global economic adversity. For future growth to be sustainable and transformative will require that its benefits are shared more equitably among the population and that governments continue to pursue policies that promote economic stability,” stated Steve Kayizzi-Mugerwa, Acting Chief Economist and Vice-President of the African Development Bank.
Human development levels in Africa have increased since 2000, with 17 out of 52 countries reaching middle or high levels of development. But the region’s poverty rates remain stubbornly high while progress in health, education and income are uneven. Huge inequalities persist between and within countries, and between women and men. In many areas, low productivity and investment, the absence of infrastructure and rural-urban networks and too few jobs outside of the agricultural sector are holding back economic and development progress.
The continent’s demographic boom is exacerbating these challenges. By 2050, both cities and rural communities in Africa will see their population grow drastically, with the countryside gaining an estimated 400 million people.
For instance, the report states that over the next 15 years, 370 million youth will enter sub-Saharan Africa’s labour markets, making it necessary to create many more jobs and opportunities for savings and investment. In addition, that population growth, combined with climate change, will exert increasing pressure on natural resources, such as food, water and land.
The report argues that past efforts to promote regional development through territorial management, infrastructure development and decentralisation have been scattered and had limited impact. As a result, the potential of Africa’s regions, which includes river basins, border areas and key rural-urban corridors, remains unfulfilled.
“African economies could benefit from mobilising the wide and extraordinary untapped potential of their diverse regions. Putting people and places at the centre of policy-making may improve Africa’s competitiveness and the well-being of Africans” said Mario Pezzini, Director of the OECD Development Centre.
Transforming economies will require exploring more productive sectors, through promoting manufacturing, developing services, creating strategies for green growth or modernising the agricultural sector.
In addition, tackling spatial inequalities would require implementing policies that cut across sectors. These include diversifying rural economies and linking them with cities, through the promotion of value chains and trade corridors. They also include unlocking domestic financing, developing transport and communication and investing in basic social services.
“Inclusive and sustainable growth is a fundamental aspect of Africa’s post-2015 development agenda for economic and social transformation,” said Abdoulaye Mar Dieye, the Director of the Regional Bureau at the United Nations Development Programme (UNDP). “We need to invest in building economic opportunities, including at the local level. And especially those of young women and men who are the architects of tomorrow’s Africa.”
The report calls for strengthening skills and education, addressing exclusion through the development of targeted social protection measures, and promoting universal access to sustainable energy and technology.
Chapter 3: Trade policies and regional integration in Africa
Africa has long sought deeper economic integration, and this chapter looks at trends and issues in trade and politics with an impact on progress being made at regional and continental levels. The chapter also examines the link between regional integration and spatial economic development, highlighting the impact of integration on industry location in Africa. Regional integration also generates spatial development, and regional institutions play a key role promoting spatial development and inclusion. Regional integration should help spread the gains from closer ties to a wider number of countries and regions. The key observations are intended to help policy makers focus on this, especially the need to help least developed and landlocked countries.
About the report
The African Economic Outlook is produced annually by the African Development Bank (AfDB), the OECD Development Centre and the United Nations Development Programme (UNDP).
For the full report, including statistics and 54 individual country notes, please visit the African Economic Outlook website. For more information on the African Development Bank’s 2015 Annual Meetings, visit www.afdb.org/am.
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African countries to stand up to mega-trading blocs
Senior officials and experts will meet to consider the future of African trade in light of the emergence of mega-trading blocs which exclude more than 160 countries from regional trade negotiations.
The meeting organised by the Commonwealth Secretariat in collaboration with the International Institute for Sustainable Development will take place in Nairobi from 26 to 27 May 2015. Participants will look at ways to ensure the trade interests of African countries are taken into account at global and regional levels.
The advent of mega-trading blocs – the Trans-Pacific Partnership, the Trans-Atlantic Trade and Investment Partnership and the Regional Comprehensive Economic Partnership in Asia – has significant implications for regions such as Sub-Saharan Africa, which, so far, has been bypassed by negotiations.
Deodat Maharaj, Deputy Secretary-General of the Commonwealth Secretariat, described the conference as ‘essential’ to amplify the concerns and interests of member countries excluded from key trade talks.
He said: “The world economy has seen a seismic shift in the trading environment with the rise of regional giants dominating the landscape. More than 160 countries are excluded from these mega-regional negotiations, including the entire Sub-Saharan Africa. The Commonwealth, therefore, has taken a leading role in raising global awareness of the implications of mega-trading blocs for countries squeezed out of deals.
“With the next World Trade Organisation conference to take place in Nairobi later in the year, this meeting is both timely and essential to bring together experts to advocate for the trade interests of excluded countries. It will be an opportunity to ensure member states do not lose out, and to find ways to boost trade in the region, vital for sustainable economic growth.”
The conference will provide a unique platform for policymakers, standard-setting bodies, experts and researchers to assess the impact of mega-trading blocs on Sub-Saharan Africa, share expertise and explore strategic responses. The keynote address will be delivered by Dr Amina Mohamed, Cabinet Secretary of the Kenyan Ministry of Foreign Affairs and International Trade.
“These mega-regionals could be major game-changers for world trade,” said Mohammad Razzaque, Acting Director of the Commonwealth Secretariat’s Trade Division.
Describing the possible negative consequences the region could face, Dr Razzaque added: “Sub-Saharan African countries could face greater competition in their key export markets, while investment may be diverted when countries cannot meet the stricter rules and standards introduced by these major new agreements.”
The Commonwealth Secretariat will present the first draft of its Policymakers Handbook on Regionalism and Mega-Trading Blocs at the meeting. Outcomes of discussions will inform the Secretariat’s ongoing programme of work to maximise the trading capacity of member countries.
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UK pledges further support towards port of Mombasa
The UK’s Department for International Development (DFID) and TradeMark East Africa (TMEA) have signed a £23million (KES3.5 billion) grant agreement.
The funding is targeted towards modernization work at the port of Mombasa including infrastructure investments aimed at addressing energy efficiency, speed up import and export trade handling, and minimise environmental impacts at the port of Mombasa. This additional support now brings total DFID funding towards the port to £63 million (KES 10 billion), further demonstrating UK’s support to Kenya’s development.
Speaking at the event, the Deputy Head of Department for International Development (DFID), Tony Gardner said: “The expansion of the port modernization work at the port of Mombasa will take into account environmental and social aspects and this will go a long way in complementing existing projects, and in expanding the flow of benefits to stakeholders, including the population of Mombasa and the wider East Africa Community residents”.
The port of Mombasa is the gateway to East and Central Africa, serving close to 250 million people along the Northern Corridor. The funding will add to the cost reductions targets under the current Mombasa port improvement programme and will contribute to reducing carbon emissions, increasing energy technologies within the port thereby improving workforce productivity. The additional support is in response to a recent study that was conducted by the Kenya Ports Authority which recommended the need for mainstreaming of climate change and renewable energy into port operations.
TradeMark East Africa Director General David Stanton added: “The UK government is TMEAs largest investor and continues to be a key ally in promoting regional and economic integration in East Africa. This project aims at minimising environmental impacts whilst addressing energy efficiencies. This investment is among many projects that TMEA is spearheading through the UK government support at the Mombasa Port to enhance trade environment in the region since East Africa has amongst the highest freight and transport costs in the world. These costs seriously erode the marginal competitiveness of goods exported by East African countries, reducing trade, economic growth, job creation and poverty reduction.”
Through TMEA, UK and its seven other development partners are currently spending about US$700m (Kshs 51 billion) on reducing barriers to trade and accelerating regional economic integration in the East African Community (EAC). Improvements at the port of Mombasa are critical to increasing regional trade in the EAC with benefits that include reductions in the cost of goods of up 40%.
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On Africa Day, UN chief spotlights continents’ achievements, reflects on challenges of 2015
Each year, Africa Day is an opportunity to celebrate the continent’s achievements and to reflect on its challenges, United Nations Secretary-General Ban Ki-Moon said on Monday, highlighting the courage and determination it took to make remarkable progress to end the Ebola outbreak and urging leaders to commit to ending violence against women and empower them.
“The dominant story of the year has been the Ebola crisis that swept West Africa, claiming at least 11,000 lives and threatening hard-won social, economic and political achievements,” Mr. Ban said in his remarks on the Day, which is celebrated worldwide on 25 May.
Now, we have to intensify efforts to get to zero and stay at zero cases, repair the damage and strengthen social and institutional resilience throughout the continent, Mr. Ban urged.
To help mobilize support for this important task, the UN chief will convene an International Ebola Recovery Conference at the United Nations in New York in July.
Overall, the continent’s economy grew by roughly four per cent in 2014, creating one of the longest stretches of uninterrupted positive economic expansion in Africa's history.
“As a result, a growing number of Africans have joined the middle class each year. With investment in education, health and infrastructure increasing, the prospects for much of Africa are bright,” the Secretary-General added.
The challenge now is to spread these benefits of Africa's progress more broadly and deeply, particularly to the women and girls who represent Africa’s future. Empowering women will help build better, more equal and more prosperous societies, Mr. Ban said, commending the commitment of the African Union to gender equality and the empowerment of women.
“While we work to break down the social, economic, environmental and cultural obstacles that women and girls face, let us also recognize the gains that have been made,” he emphasized.
“Africa leads the world in female representation in parliaments and the continent has one of the highest rates of female entrepreneurship. Let us be inspired by these successes and intensify efforts to provide Africa’s women with better access to education, work and health care and, by doing so, accelerate Africa's transformation,” the Secretary-General said.
He called on the international community to do more to end violence against women and girls while strengthening their role in all fields, including peacebuilding.
Despite an overall decline in the number of conflicts, too many Africans still experience violent conflict. Women and girls bear the brunt and are frequent targets of sexual violence and abuse.
“We know that conflicts breed where people suffer from poor governance, human rights violations, exclusion and poverty,” the UN chief said, applauding Africa’s vision to build, by 2063, a peaceful and prosperous continent where democracy, human rights and the rule of law are entrenched and flourishing, starting with the aim to silence all guns by 2020.
“I reaffirm the commitment of the United Nations to work with the African Union, the regional economic communities and African countries and their citizens to make this vision a reality,” he added.
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Women’s empowerment at top of agenda as AfDB launches Gender Equality Index for Africa
Are women and men on a level playing field? That was the question of debate on Monday, May 25 as the African Development Bank (AfDB) unveiled its first-ever Gender Equality Index for Africa in Abidjan, on Day 1 of the Bank’s 50th Annual Meetings.
The index, titled the Empowering African Women: An Agenda for Action, was launched as part of the opening events at the week-long AfDB meetings, in a session called “Gender Equality: Where are we?”
Geraldine Fraser-Moleketi, AfDB’s Special Envoy on Gender, said at the index’s unveiling ceremony that it’s expected to provide African governments with a benchmark to evaluate the effectiveness of their policies to advance gender equality.
The index, which covers 52 of Africa’s 54 countries, examines the role of women as producers, in human development, as active citizens and leaders and also provides maps for each area.
Its launch comes at a time when women’s empowerment is on the top of the African agenda with the African Union having declared 2015 the year of Women’s Empowerment and Progress towards Agenda 2063, to optimize resources to the benefit of all Africans.
In a brief comment about the index, AfDB President Donald Kaberuka said the Bank has decided to be at the forefront of gender equality efforts: and for this reason the position of Special Envoy on Gender was created.
“At the time of creating the position, the AfDB was great at so many things, but falling short on many others. By creating the position of Special Envoy on Gender, it was a signal that the subject meant a great deal to the Bank’s business and I hope my successor will continue with this trend,” he said.
The index lauds African countries such as Rwanda, which, with 64 percent female representation in public service, including Parliament, has the best gender representation globally, a feat that the AfDB encourages other African countries to emulate.
During a high-level panel to discuss the new index, Frannie Leautier, CEO of the Mkoba Private Equity Fund in Tanzania, said men and boys have a great role to play in ensuring inclusivity for women and girls.
“Without good gender policies in place, women can still make it, but they would have to grow muscles to navigate in the unlevel playing field and I hope stories of successful women can help inspire other women to make it,” said Leautier.
Also on the panel was Ashish Thakkar, founder of Mara Group and Mara Foundation, who said that there’s a need to celebrate more successful women who have made it in spite of the current challenges in many countries in Africa.
Thakkar said, at Mara, the organization has a gender inclusive approach in choosing which start-up entrepreneurs to work with although he said women applicants are still few.
“Out of the over 500 young entrepreneurs we are currently working with, only about 30 percent of them are women. The figure is low. We still have to do a lot to encourage young women that they can make it,” he said.
Saran Daraba Kaba, Executive Secretary of Mano River Union based in Sierra Leone, said helping women achieve higher success should start with enabling them to attain basic level education to set their foundation for bigger achievements.
Members of the panel agreed that African governments must work towards achieving inclusive growth that leaves no one behind including women.
However, the AfDB’s Special Envoy on Gender, Fraser-Moleketi, also challenged women and girls to stand up and claim their rights and space.
“Women must make an effort to claim the space and fill the space because what men can do, they can do too,” she said.
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Reliance on trade makes food systems vulnerable
Boosting international trade may not be the best way to improve food security, as it makes many countries vulnerable to food shortages caused by market fluctuations, according to new research.
A study published on 11 May in Proceedings of the National Academy of Sciences found that countries heavily reliant on importing their food – including many in the Arab world and Latin America – are more exposed to environmental and market shocks than those where at least half of all food is home-grown.
As the global population grows and agricultural production reaches the planet’s maximum capacity, food trade systems can destabilise more easily as small shocks in food supply will impact more people, the study warns.
“It challenges the idea that all trade is good,” says Paolo D’Odorico, environmental scientist at the University of Virginia in the United States, and one of the study’s authors. “We depend on trade but at the same time we need to be aware that it makes the whole food system vulnerable to crisis.”
D’Odorico and his team analysed trade and food production data from 140 countries between 1986-2010. They used computer modelling to simulate how small changes in population affect the quantity of food that is available through a combination of local production and trade.
Countries that rely on imports are much more vulnerable to food pressures caused by population growth and they find it harder to secure their food supply than exporting countries or those where imports and exports are roughly equal, the researchers found. Much of North Africa, the Middle East and Latin America fall into this vulnerable category, they say.
“We depend on trade but at the same time we need to be aware that it makes the whole food system vulnerable to crisis.” Paolo D’Odorico, University of Virginia
Also, the number of countries deemed at risk of food shortages has ballooned during the last 25 years – whilst at the same time the planet witnessed an explosion in international trade, the paper states.
This increase in global food trade was caused in part by innovations in agriculture that allow for more food production and preservation.
David Debucquet, a senior research fellow at the International Food Policy Research Institute in Washington, United States, says trade can be a help, not a hindrance, to food security, as it triggers the development of technology.
The potential for companies to recoup the cost of developing innovations through global expansion helps drive their research and attracts foreign investment in national food systems, he says.
D’Odorico, on the other hand, believes that creating sufficient stockpiles of food in import countries is the most effective safeguard against shocks in food availability, such as natural disasters and bad harvests. Global grain stocks have fallen by ten per cent since 1990 as a result of easier access through trade, and are now only able to fulfil a fifth of annual demand, according to the paper. Rebuilding these stocks must be a top priority for governments to safeguard against food shortages, says D’Odorico.
However, existing food stocks around the world are not well monitored, the paper states, and it is uncertain if these reserves would be maintained through trade.
But Debucquet says that, despite such misgivings, trade has an overall positive effect on stabilising food prices and mitigating extreme weather events.
“From time to time you have a big accident that is often linked to bad policies but there is nothing wrong with trade itself,” he says.
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tralac’s Daily News selection: 25 May 2015
The selection: Monday, 25 May
Africa and the New Global Landscape: AfDB 2015 Annual Meetings start today in Abidjan
Bank Governors, usually Finance and Economy Ministers or Central Bank Governors representing the Group’s 80 member countries, will lead over 2,500 delegates and confirmed participants at the meetings which are taking place on the central theme, “Africa and the New Global Landscape.” The gathering will review the Bank’s 2014 operations and its 2015 development funding portfolio, as well as challenges facing the African region in key areas such as climate change, infrastructure, private sector and governance.
Just launched: The African Economic Outlook 2015 and 54 country notes is posted
@AfDB_Dominic: Big week coming up for @AfDB_Group as it chooses a new President at its Annual Meeting in Abidjan, follow hashtags #afdbdecides #AFDBAM2015
Sakala carries SADC's hopes (The Standard)
Why you should care who’s in line to run Africa’s development bank (Quartz)
Oil slump, slow growth greets new African Development Bank Chief (Bloomberg)
How much has African Development Bank impacted on Africa’s economies? (Daily Monitor)
Establishment of a natural resources management centre: concept note (AfDB)
The Bank has been working with countries in the management of natural resources to find paths to development that ease pressure on natural assets while better managing environmental, social and economic risks. Given the existing demand, for the Bank to play this role effectively and meet the expectations of RMCs, there is it needs to scale up its work on NRM. This paper outlines the challenges in NR management, the role of the Bank and a proposal for the establishment of a Natural Resource Centre as a way to consolidate and reinvigorate the support to the sector.
Nkosazana Dlamini-Zuma: ‘Africa is world’s biggest exporter of jobs’ (IOL)
Accounting for natural resources, green economy key for Africa’s devt (New Times)
Adan Mohamed: 'Why Kenya textile sector needs new and expanded AGOA trade pact' (Business Daily)
Finally, the ongoing US-Kenya private sector engagement is now more robust than before, something that we must aggressively take advantage of to create an inclusive growth agenda in trade and investments. Kenya is committed to make major policy shifts, including strides made in reducing the cost of doing business, mitigation of non-tariff barriers and development of value chains, key to seizing the opportunity. [The author is the Cabinet Secretary for Industrialization, Enterprise and Development]
South Africa and the United States push for resolution of the chicken issue (the dti)
Simon Freemantle: 'Trade patterns underline Africa’s shifting role' (Business Day)
We have known for some time that Africa’s commercial relationship with the world is changing. Two correlated features explain this. [Standard Bank: Africa's re-pivoting trade portrait: 2014]
Trade ministers to meet next month in Paris on WTO (Zee News)
Trade ministers of about 15 countries including India, the US, EU, Australia, Brazil, South Africa and China are expected to attend this crucial meeting. India will present its views on bringing back issues related to the long-stalled Doha Round including agriculture (export subsidies, cotton and fishery subsidies), market access and services, the official said. The ministers will finalise the agenda for the Ministerial Conference, which is the highest decision making body of the World Trade Organisation, scheduled from December 15-18 in Nairobi, Kenya.
EIF steering committee endorses the scope and modalities for 2016-2022 second phase
"The second phase of the EIF Programme will produce a more dynamic and result-driven EIF, demonstrating increased efficiency, effectiveness, sustainability and value for money," said Ambassador Yvette Stevens of Sierra Leone and Chair of the EIF Board. The new measures will ensure the success of the EIF as a unique global trade partnership for LDCs, as was highlighted by Supriya Kumar Kundu on behalf of Bangladesh as the LDC Coordinator:
Kampala–Juba–Addis Ababa–Djibouti Corridor: trade and transport facilitation study
Part of the grant is intended to cover the Consultancy Services for Trade and Transport Facilitation Study which comprises (i) trade and transport facilitation study for the Kampala–Juba–Addis Ababa-Djibouti Road Corridor, (ii) feasibility studies, architectural and detailed engineering design and preparation of bidding documents for one stop border posts at the South Sudan–Ethiopia order and Ethiopia–Djibouti border. The scope of services included under this project among others are:
Djibouti dreams of being ‘new Dubai’ (Daily Nation)
Uganda: SGR project to start next month (Daily Monitor)
Construction of the Standard Gauge Railway in Uganda is set to commence next month in Kampala, Works minister John Byabagambi has revealed. He said construction of the railway line, which will connect Uganda, Kenya, Rwanda and South Sudan, is expected to be complete in 36 months. The project will commence with the Kampala-Tororo axis.
Kenya, AfDB ink Sh10.4bn deal for dual carriageway for Mombasa-Mariakani road
South Africa: competition issues in liner shipping (OECD)
Most of the abovementioned exemption and cartel investigations seem to have mainly been triggered by exemptions granted in other jurisdictions such as Europe. The Competition Commission has also received and considered mergers in the liner shipping industry. This paper therefore reflects the experience of the Commission and highlights the challenges it has encountered in its approach to the liner shipping industry from the different enforcement and merger cases it has handled.
Zimbabwe to develop new mining fiscal regime (The Herald)
Government is working with the Royal Norwegian Embassy and the World Bank to develop a new Mining Fiscal Regime network which will create an efficient transparent and productive tax system. Finance and Economic Development Minister Patrick Chinamasa told delegates at the Chamber of Mines 76th annual general meeting last week that the current mining fiscal regime had its challenges which have created a host of distortions and administrative challenges.
Rwanda: Forum seeks to enhance supply of professional services to EAC (New Times)
Policymakers and professionals will Tuesday meet at a consultative forum in Kigali to review the state of matters in regard to regulation of professional services committed by Rwanda under the EAC Common Market Protocol. The meeting will look into challenges encountered in the process, as well as assess the rate of cross-border practice by Rwandan professionals.
Barclays win over KRA saves banks hefty tax demand (Business Daily)
Barclays Kenya has won a protracted legal battle with the Kenya Revenue Authority, which was demanding tax payments on fees remitted to Visa, Mastercard and American Express for electronic money transfer services. Justice George Odunga last week ruled that the taxman’s classification of withholding tax on the royalty fees is vague and cannot be used to demand levies from the bank. There are 12,552,312 debit cards in the country, according to statistics released by the Financial Sector Deepening in February, and the number is likely to continue increasing. Currently, 27% of retail transactions are done electronically.
Let market forces determine sugar imports: Wassira (The Citizen)
Requesting the National Assembly to endorse Sh353.14 billion for his ministry during the 2015/2016 financial year, Mr Wassira said Tanzania produces an average of 300,000 tonnes of sugar for domestic use annually. The country’s demand stands at 420,000 tonnes of sugar for domestic consumption plus other 170,000 tonnes of sugar for industrial use yearly.
Botswana: Local businesses seek opportunities at Namibian dry port (Mmegi)
The Botswana Investment and Trade Centre will [this week] take 15 local business people to Namibia, on a trade mission to expose them to opportunities that exist at the recently opened Dry Port in Walvis Bay.
BOCCIM changes name to ‘Business Botswana’ (Mmegi)
Zambia: IMF concludes 2015 Article IV Consultation (IMF)
Key risks to the outlook are delayed fiscal adjustment in the lead-up to general elections in 2016, persistent low copper prices, and policy uncertainties that could undermine investment in the economy. On the upside, steps taken by the government to resolve mining taxation problems by easing documentation for VAT refund claims by exporters and the decision to rescind the new fiscal regime for mining introduced in January 2015 could lead to higher copper production and growth.
Roberto Azevedo: 'For global cities, the global trading system works best' (Straits Times)
Some have suggested that the proliferation of regional agreements may, in some way, constitute a threat to the WTO and the multilateral trading system. I disagree. Trade liberalisation is contagious, and when countries agree to open markets in a regional setting, they are more inclined to do so globally as well.
Out of African opportunities (Sydney Morning Herald)
Australian businesses are continuously being informed of the opportunities in neighboring Asia but we have a neighbor to the West that is equally worthy of our attention. Australia's bilateral merchandise trade with Africa grew to almost $12 billion in 2013, more than double the value in 2009, which is indicative of the positive changes taking place in the region and the growing opportunities for trade and investment. So where do the opportunities exist for Australian small businesses in Africa? [The author, Stacey Mills-Smith, is the trade policy and research manager for the Export Council of Australia]
The Coming Financial Climate (UNEP)
Harnessing the global financial system to deliver climate security, reduce the risks of high carbon assets, and scale up capital for the low carbon transition is possible, but will only happen with a comprehensive, system-wide approach to financing - including the $37 trillion of energy infrastructure - in the next two decades. Drawing from an array of policy innovations, some of which are already taking place at the country level, 'The Coming Financial Climate', a new report by UNEP, identifies measures that can make climate security an integral part of a sustainable financial system.
Malusi Gigaba: 'Africa is central to SA's future' (IOL)
Perceptions that bog down EAC integration (Business Daily)
What treaty? Anger, delay at EA borders (Daily Nation)
Citizens wait on Buhari as Nigeria’s economy shuts down (BusinessDay)
ECA and UMA assess progress made in joint cooperation (UNECA)
EALA wants speedy implementation of peace and security decisions (EALA)
Kenya punching below its weight in battle for FDI (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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Free trade area to link Cape and Cairo
The Tripartite Free Trade Area stretching from Cape to Cairo – which has been in the works since 2008 – will be launched on 10 June in Sharm el-Sheikh, in Egypt.
Trade and Industry Minister Rob Davies gave the date in a media briefing ahead of his budget vote in the National Assembly, in parliament, Cape Town, on 21 May.
The zone will stretch from Egypt to South Africa and will connect consumers in the 26-member countries of three existing trade blocs: the Common Market for Eastern and Southern Africa (Comesa), the East African Community (EAC), and the South African Development Community (SADC).
“The Tripartite Free Trade Area… will signal that we are on track to create a market of over 600 million people with a combined gross domestic product [GDP] of over $1-trillion,” he said in his budget vote.
“Later in the same month, in South Africa, negotiations will be launched for the establishment of a Continental FTA that will embrace the entire continent – a market of 1.3 billion people with a combined GDP of over $2-trillion.”
Those negotiations will be launched at the 25th AU Summit, taking place in South Africa from 7 to 15 June.
In announcing these moves, Davies said South Africa had been playing a prominent role in championing developmental integration in the regional economic communities of which it was a member, and in the African Union.
“These developments follow the extraordinary SADC Summit held last month which approved a SADC Regional Industrialisation Strategy and Roadmap. South Africa strongly supports regional and continental efforts to build more industrialised and diversified economies and reduce member states’ overdependence on primary products.”
Speaking to the media on the sidelines of his budget vote, Davies said South Africa supported the T-FTA because it believed that such a zone could contribute to the regional value chain. While it would be launched officially next month, he admitted there were still some “tariff schedule agreements” that needed to be finalised.
These were unpacked in his budget vote delivered to the National Council of Provinces a day earlier, on 20 May.
“There has been a concerted effort to enhance access for South African products, especially value-added exports in international markets. Africa remains at the centre of our efforts, where we have been actively championing continent-wide industrialisation and an ambitious development integration programme,” he said in explaining South Africa’s involvement in the T-FTA.
“[Its] launch signifies the conclusion of negotiations on the legal instrument and will be followed by a process to finalise negotiations on tariffs and Rules of Origin, the key elements of a functional free trade area. This is an important milestone in the implementation of the development integration agenda in Africa aimed at promoting market integration, based on industrial and infrastructure development.”
The African market was crucial for South Africa’s industrialisation and job creation efforts as one of the key destinations for its value-added exports, Davies explained to the council of provinces.
The T-FTA will account for half of the membership of the African Union and 58% of the continent’s GDP, according to a statement issued following the Tripartite Sectoral Committee of Ministers in Bujumbura, Burundi, on 25 October 2014.
“The Tripartite FTA, popularly known as the Grand Free Trade Area, will be the largest economic bloc on the continent and the launching pad for the establishment of the Continental Free Trade Area (CFTA) in 2017,” reads part of the statement.
“It 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 harmonised trade regime that reduces the cost of doing business.”
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South Africa and the United States push for resolution of the chicken issue
South Africa and the United States have agreed to facilitate deliberations between the South Africa Poultry Association (SAPA) and the US Poultry and Egg Export Council towards finalisation of discussions on market access for US chicken bone-in cuts into South Africa. The meeting will take place on 4-5 June 2015 in Paris, France, on the margins on the OECD Ministerial Council Meeting to be attended by Minister Davies and Ambassador Froman.
Both governments’ remain committed to work with their respective poultry industry to find an amicable solution. A bilateral engagement between Minister Davies and Ambassador Froman is scheduled for 5 June 2015 to brief them on developments.
The meeting is a follow-up to the Trade and Investment Framework Agreement Council meeting co-chaired by the Minister of Trade and Industry, Dr. Rob Davies and the United States Trade Representative, Ambassador Michael Froman on 16 April 2015 in Washington D.C.
Meanwhile, Minister Davies told Members of Parliament during his Budget Vote on Thursday, that he had been concerned about the terms of the US on South Africa’s re-entry into Agoa. He said he had always argued that “why fix it, when it ain’t broken”.
This follows the US Senate decision of passing a Bill that provides for the African Growth and Opportunity Act (AGOA) to be extended for a period of 10 years with South Africa included.
“New provisions in the Bill however strengthen the conditionalities that will apply and clearly seek to chart a course “to transform the relationship between the US and Africa from non-reciprocal concessions to reciprocal agreements,” said Minister Davies.
However, Davies said despite these challenges he is optimistic that next month meeting in Paris could resolve the chicken impasse between the South Africa Poultry Association (SAPA) and the US Poultry and Egg Export Council.
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Continent is central to SA’s future
Malusi Gigaba writes that our socio-economic development is and must be linked with the rest of Africa for the AU’s Agenda 2063 to be realised.
Africa Day presents a chance for South Africans to reflect on our great continent’s shared destiny. Our enduring Pan-African unity is based on unbreakable ties of history, culture and shared struggle, and an awareness that our socio-economic development is and must be linked for the AU’s Agenda 2063 to be realised.
Africa’s support for our struggle was steadfast, principled and costly: When the apartheid regime tightened its noose around the necks of the oppressed, and banned the national liberation movements in 1960 following the Sharpeville protests, Africa opened her arms to receive our freedom fighters as exiles. They extended their unconditional warmth, friendship, solidarity and hospitality to our freedom fighters. Even the poorest of African states gave their all in support of the South African liberation struggle.
For this support, innocent citizens of Lesotho, Botswana and Mozambique were butchered in their sleep by the apartheid army, and Zimbabwean and Angolan territories were violated by a regime that had no respect for human life, let alone the national sovereignty, territorial integrity and stability of its neighbours.
South Africa’s liberation in 1994 guaranteed Africa’s long-term stability and development. It meant the country ceased to be what Hendrik Verwoerd had called “a piece of Europe on the tip of the African continent”.
The struggle bore a Pan-African identity with historic responsibilities that stretched far beyond South Africa’s borders. During the past two decades, the liberated South Africa has contributed towards the new African renaissance by supplying the materials requisite towards this all-encompassing effort.
South Africa was among the foremost advocates for the development and adoption of the New Partnership for Africa’s Development (Nepad). We invested time and resources towards uniting the continent, helping to forge a united global political and economic agenda at a time when imperialism and the neo-liberal globalisation was further marginalising and ruthlessly exploiting the continent.
For Africa to develop on a sustainable basis, we need to entrench peace, democracy and good governance, and advance major economic growth strategies, including infrastructure investments; beneficiation of mineral wealth; industrialising and diversifying of economies to free ourselves from the resource curse and drastically improving intra-African trade and trade with other emerging economies.
Only these programmes can radically alter Africa’s relations with itself and the world, and place it on a footing for sustained growth, job creation and enhanced political power in the global arena.
South Africa needs Africa: It has integrated itself into the continent not only through political and peace efforts, but increasingly through growing investment, trade and tourism.
While the country remains largely an exporter of primary commodities and an importer of manufactured goods, during the past 20 years sub-Saharan Africa, including Nigeria, Ghana and most of the Southern African Development Community (SADC), has emerged as the largest importer of South African-manufactured goods. It has been estimated South Africa exported about R300 billion worth of goods last year. Trade, investment and tourism with the rest of the continent has created and sustained 160 000 jobs in South Africa.
While we celebrate the growth of South African trade and investment in Africa, there is an obvious imbalance in favour of South Africa. So, if Africa is so vital for the South African economy, it should stand to reason that African integration, intra-African trade and the overall growth and development of the African economy should be equally as important.
We cannot do this alone! Our global political and economic aspirations are interconnected with, and not separate from, the continent as a whole.
We are one! We cannot fulfil our historic role and responsibility to raise Africa’s position in global affairs if the people of the continent think we have a condescending attitude towards them or want their support, but do not want to help them in their hours of need.
The recent violence against African migrants is inexcusable and has cost us. The attacks set back our African agenda. We must not take this for granted, or be naive as to the cost we incurred.
While fellow Africans may understand they have a responsibility to address the “root causes” of migration, to fix their economies and minimise the incentives for their nationals to travel to South Africa at all costs, they also know we have a responsibility, out of an African solidarity, to help build their economies because they supported our struggle to defeat apartheid.
Agenda 2063 can only be achieved by sustained, co-ordinated actions between increasingly integrated African countries.
South Africa has made critical contributions in this regard and will continue to do so in a quest for a better life for all.
Gigaba is Minister of Home Affairs and member of the ANC NEC. A version of this article appeared in the ANC Today. The views expressed here are not necessarily those of Independent Media.
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Forum seeks to enhance supply of professional services to EAC
Policymakers and professionals will Tuesday meet at a consultative forum in Kigali to review the state of matters in regard to regulation of professional services committed by Rwanda under the EAC Common Market Protocol.
The meeting will look into challenges encountered in the process, as well as assess the rate of cross-border practice by Rwandan professionals.
According to the Ministry of East African Community Affairs (MINEAC), the forum will also assess the effect of non-recognition of academic and professional qualifications granted by EAC partner states, which deters cross-border practice.
Denis Karera, vice president of East African Business Council, told The New Times that the forum is timely as Rwandan professionals need to self-evaluate and see how to best push further into the open EAC market.
“We need to evaluate ourselves as professionals and know where we are in the regional market. Are we fitting in it, compared to other regional professionals? We shall then be able to consider where we need to upgrade,” Karera said.
Professional services committed by Rwanda under the protocol comprise medical, legal, accounting, auditing, book keeping and taxation, education, veterinary services; in addition to construction, architectural, quantity surveyors, urban planners, and engineers’ services.
Karera added: “We have been crawling so the forum is a test for us. It’s not too late.”
The Private Sector Federation (PSF) director of advocacy, trade and labour relations, Antoine Manzi Rutayisire, said there are many challenges encountered, especially in Tanzania.
Everything revolves around the principle of mutual recognition of professionals in EAC partner states, he said.
“I am optimistic the meeting’s resolutions will be acted upon,” Rutayisire said.
The first ever such national consultative forum will also examine successes and challenges faced in the implementation of existing mutual recognition agreements (MRAs) between professionals in EAC; and review the status of negotiation on harmonisation and mutual recognition of academic and professional qualifications in the East African Community.
Increasingly common since the formation of the World Trade Organisation in 1995, MRAs are international agreements by which two or more countries agree to recognise one another’s conformity assessments.
Outcomes of the forum
Expected outcomes include the identification of policy actions to facilitate full regulation of professional services committed by Rwanda under the Common Market Protocol; and identification of other restrictions hampering free movement of professional services from Rwanda to other partner states.
MINEAC says regional integration continues to play a significant role in Rwanda’s development through opening up new markets, reduced cost in hiring professionals, and an increased skills base.
From 2010 to 2014, about 400 regional companies opened shop in the country, employing about 2,500 Rwandans.
The Services Sector Review Report on Rwanda, issued by UNCTAD (2013), says the sector is now the largest and most dynamic in the Rwandan economy.
In 2014, the GDP share of the services sector in Rwanda was 47 per cent.
Under the Common Market Protocol, partner states undertook to mutually recognise the academic and professional qualifications granted, experience obtained, requirements met, licences or certificates granted across EAC.
Partner states are supposed to harmonise their curricula, examinations, standards, certification and accreditation of educational and training institutions.
But, as per the forum’s concept note by the ministry, non-recognition of academic and professional qualifications granted by partner states continues to deter cross-border practice for professionals that constitute the critical mass of the labour force that drive the integration agenda.
The ministry says the rationale for the forthcoming national consultative forum is to unlock existing challenges that impede the development of professional services in Rwanda.
The forum will also examine difficulties faced by professionals from other EAC partners that need to practice in Rwanda.
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Customs Experts gather for the 2nd time in Harare, Zimbabwe to discuss Coordinated Border Management in Africa
A three day African Union Customs Experts meeting organized by the Department of Trade and industry of the African Union Commission, in collaboration with the Zimbabwe Revenue Authority commenced on 20 May at the Holiday Inn Hotel in Harare, Zimbabwe. The meeting is held with the objective of contributing to the development of an African Union Border Management Strategy; provide a platform for exchange of views and experiences on issues of trade facilitation in line with the WTO Trade Facilitation Agreement and movement of people across borders.
“The objective of this meeting on which we are going to exchange views and ideas for the next three days on implementation of Coordinated Border Management in Africa is not new, the practice is based on the need for agencies and international community to work together to achieve common goals,” said Mrs. Treasure Maphanga, Director, Trade and Industry in her remarks at the opening.
In recalling further the various challenges that agencies face with border management responsibilities, ranging from health, product safety, quarantine, immigration controls, vehicle inspections, insurance, road access tolls, security as well as revenue and other customs concerns, the fundamental nature of the defies that each agency confronts is how to facilitate the legitimate trade. “But for all this to make impact on African economies, we need to involve the private sector that conduct business and trade across borders,” appeals Mrs. Maphanga. She later concluded by encouraging the experts to come up with sound recommendations on implementation of Coordinated Border Management so as to boost intra African trade which in turn improves the lives of the African People.
Before officially opening the meeting, the Commissioner for Customs and Excise of the Zimbabwe Revenue Authority Mr. Happias Kuzvinzwa welcomed the delegates to Zimbabwe and emphasized that “the customs Border Management topic and all issues related to trade facilitation are pertinent to the African Continent in view of enhanced public service delivery and increased efficiency in customs and border operations”. Mr. Kuzvinzwa highlighted the Zimbabwe’s positive experience with the Chirundu One Stop Border Post and informed the meeting that plans are already underway to establish another OSBP at Victoria Falls primarily targeting tourists and business persons. Full speeches will be available on: http://ti.au.int/en/
Customs Experts from Customs Departments of the Regional Economic Communities (RECs), the Bureau of the African Union Sub-Committee of Directors General of Customs, some African Union Member States and Experts International organizations such as the International Organization on Migration, World Customs Organization and Private Sector Organizations, are attending this meeting.
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Accounting for natural resources, green economy key for Africa’s devt
African countries are at a critical juncture in their development trajectories. Confronted with internal challenges of poverty and unemployment, the resource basis of many productive sectors is facing threats of environmental degradation, including deforestation, soil erosion, desertification, and loss of biodiversity, depletion of fish stocks compounded byeffects of climate change.
At the same time, these challenges represent opportunities for change. A green economy offers considerable opportunities for mobilising resources towards an economic growth pathway that is low-emission in terms of carbon-dioxide and other so-called greenhouse gases released in the atmosphere during economic production activities.
A green economy also builds a culture of resource efficiency in economic activities and of sustainable consumption among the population as well as climate-resilient housing, infrastructure and other economic installations, while at the same time adapting to different approaches to promote, among others, resilient agricultural production, diversification into off-farm livelihoods and other diversification innovations for the local and export markets.
However, the combination of tackling poverty, accelerating growth and development, and addressing climate change, is likely to involve trade-offs and policy choices between mutually supportive, but equally important priorities toward the improvement of welfare and quality of life for Africa’s citizens.
Natural capital accounting and natural resource wealth valuation are not a fringe activity but a cornerstone of wealth upon which sustainable, equitable and prosperous Africa will be built.
Natural resources are thus critical to the economic activities and the livelihood of millions of African people who depend on water, fertile soil, forest, fishery and other resources from nature.
The exploitation of these resources fosters high rates of economic growth, which in recent years have been among the strongest in the world. Notwithstanding such contributions, African countries continue to face persistent poverty and unemployment and underemployment, particularly among the continent’s fast growing young population.
At the same time, the potential for future economic growth and development itself is put at risk, as a result of environmental degradation, climate change, desertification, and other environmental risks and resource scarcities, which are driven by internal and external factors.
The natural capital, an essential basis for wealth creation, faces mounting pressure at a time when African countries need to meet the growing demand for water, food and health, whilst reducing poverty and stimulating economic activity to create employment and raise income levels.
African economies are highly dependent on their natural resources which, in many countries, form the basis of economic activity. While the exploitation of such resources generates economic benefits in the short run, resource depletion decreases the potential for economic growth and development in the long term.
Recent years have seen a growing recognition that a new system of resource valuation and accounting is urgently needed, in particular to help countries more accurately assess the wealth accruing from these natural resources.
Natural resources and minerals appear in numerous forms throughout Africa, ranging from forestry to minerals including gold, oil, and copper. Other minerals, such as nickel and bauxite, are used in rechargeable batteries and represent the world’s primary source of aluminum. Not only are these minerals vital to products and standard technologies around the globe, but also to African growth.
An inclusive green economy has the potential to improve human well-being and social equity, while significantly reducing environmental risks and ecological scarcities in the continent.
In a green economy, growth in income and employment is driven by public and private investment that reduces carbon emissions and pollution, enhances energy and resource efficiency, and prevents the loss biodiversity.
These investments need to be catalyzed and supported by targeted public expenditure, policy reforms and regulation changes.
Some improvements have been seen. Over the past century, pollution controls and other measures have reduced the environmental impacts of economic growth. And, thanks to innovations in manufacturing, product design and energy use – aided by the rising number of people living more efficient lifestyles in cities – the global economy has grown faster than resource consumption growth.
Rwanda is one of the leading countries in terms of promoting green growth. A national “Green Growth and Climate Resilience Strategy” proposes ways to integrate resource efficiency, adaptation and mitigation actions across all sectors of the economy, focusing on the socio-economic development and future prosperity of Rwandans.
FONERWA, the largest demand-based climate fund in Africa, is a national fund through which international and domestic climate finance can be managed and it is intended to be the primary vehicle through which Rwanda’s climate and environment finance is channeled, disbursed and monitored.
In addition, Rwanda has an international track record in pursuing good governance, sustainable growth on the basis of prudent economic management, sound investment of mineral revenues in human and physical capital including health and education infrastructure, establishment of social safety nets, and the wise use and conservation of natural resources and biodiversity in and outside of protected areas.
To date, the country continues in her endeavors to diversify the green economy initiative which is mirrored to bring more gains as far as economic transformation is concerned. Green village pilot project has, for instance, brought great potential to mobilise additional private and domestic resources required to achieve sustainable development goals.
This proves what Mr Achim Steiner, an expert in environmental issues and Executive Director of the United Nations Environment Programme, who once said that inclusive green economy has the potential to improve human well-being and social equity, while significantly reducing environmental risks and ecological scarcities.
tralac’s Daily News selection: 22 May 2015
The selection: Friday, 22 May
The Heads of State and Government reiterate the importance of the free movement of persons and goods and the Common External Tariff in the consolidation of the common market. It appeals to all Member States to keep constant watch to ensure that all obstacles to free movement are removed. In particular, the Summit urges the Member States yet to do so, to take appropriate measures to implement the CET before the end of 2015. The Authority directs the President of the Commission to expedite measures for the entry into force of the ECOWAS biometric identity card.
In order to promote regional trade and guarantee a competitive environment for investment development, the Authority instructs the Commission to speed up actions for the finalisation and adoption of the common investment code and the investment policy. It further requests that the Commission accelerate the process of finalising the trade policy document. The Authority encourages the Commission in its efforts to foster the establishment of public-private partnerships for financing development in West Africa.
The Authority urges Member States yet to sign the Economic Partnership Agreement (EPA) to do so as soon as possible with a view to facilitating its implementation.
President Macky Sall is new ECOWAS chairman
ECOWAS Heads endorse eradication of statelessness (GhanaWeb)
Abidjan Declaration of Ministers of ECOWAS Member States on Eradication of Statelessness
Coordinated border management in Africa: Harare conference (AU)
The meeting is held with the objective of contributing to the development of an African Union Border Management Strategy; provide a platform for exchange of views and experiences on issues of trade facilitation in line with the WTO Trade Facilitation Agreement and movement of people across borders. Mr. Kuzvinzwa (ZRA) highlighted Zimbabwe’s positive experience with the Chirundu One Stop Border Post and informed the meeting that plans are already underway to establish another OSBP at Victoria Falls primarily targeting tourists and business persons.
‘Involve private sector in border management’ (NewsDay)
New Agoa deal expects more of SA but offers less, says Davies (Business Day)
New conditions attached to the US’s African Growth and Opportunities Act (Agoa) and changes in US trade policy would reduce the value of the measure for SA while raising its costs, Trade and Industry Rob Davies said on Thursday. This is the first time Mr Davies has expressed disillusionment over the way the renewal of the act, which expires at the end of September, has been used to extract concessions from SA. He said he would raise the matter in the Cabinet shortly.
Davies upbeat over US talks in Paris (Business Report)
US firms blast SA security law (Business Report)
Ministries discuss trade implications of private security Bill (EWN)
Intra-SACU trade relationships and related issues (tralac)
Much of the focus of South Africa’s trading relationship with BLNS countries is on the SACU revenue-sharing formula, a formula which is based entirely upon one side and one side only of this relationship. The SACU tariff revenue pool is divided on the basis of intra-SACU imports. These imports are dominated by BLNS imports from South Africa. The objective of this paper is to analyse the South African Customs Union (SACU) trading relationship and briefly discuss the tariff revenue-sharing formula before going further and examining the implications of interrelated themes in terms of regional development.
SADC Trade in Services negotiations and the development of sector specific annexes (tralac)
However, it is the Member States’ commitment to regulatory, administrative and institutional reforms that is receiving very little attention at this stage of the negotiations. It is arguably due to a lack of attention to these matters that the negotiations are progressing at lacklustre speed and disappointing levels of ambition.
SADC regulators urged to strengthen links (National Biotechnology Authority, Zimbabwe)
SADC countries must strengthen the links between national biosafety regulatory authorities to enhance the region’s capacity to manage and handle the potential risks associated with genetically modified organisms (GMO) products, a Government official says. Higher and Tertiary Education, Science and Technology Development Deputy Minister Dr Godfrey Gandawa told delegates at a regional biosafety training workshop held recently in Harare that strengthening linkages would help Sadc countries to manage biotechnology products given the fact that the countries share common borders across which goods and services move.
SADC: briefing notes by Dr SL Tax
The Secretariat briefed the Chairperson [President Mugabe] on steps being undertaken in preparing an action plan and a coordinated mechanism for the implementation of the Industrialisation Strategy going forward, as an integral part of the implementation of the revised RISDP, SADC’s blue print for development, to ensure tangible outcomes for the benefit of SADC citizens. The Secretariat also engaged the Chairperson on challenges that it is facing with the view to address them through the various policy organs of SADC. The Chairperson mandated the Chair of the Council of Ministers to address the challenges identified, including improvement of conditions of service of staff, and align them to other regional bodies.
Namibia: Informal traders export goods worth millions (New Era)
In addition to the N$64.5 billion worth of goods that Namibia exported last year, is the N$12.258 million worth of goods exported by the often-ignored informal traders commonly seen at various border posts with huge loads of goods on bicycles and wheelbarrows. In a maiden survey of only six border posts, the Namibia Statistics Agency (NSA) found that informal traders export goods worth millions but are not captured formally because the trade figures are below the Customs and Excise threshold for recording. The survey was conducted at Ariamsvlei, Noordoewer, Omahenene, Oshikango, Wenela and Calai border posts.
Zimbabwe: Retailers cry foul over vendors (The Herald)
Retailers have pleaded with Government to protect them from unfair competition posed by influx of inferior imported products, address problems faced by street vendors and deal with serious challenges they pose for formal business. The retailers made the plea when highlighting the cocktail of problems they want Government and its regulatory arms to address to save their businesses from potential collapse.
Ethiopia’s economy expected to grow by 9.5% (Reuters)
Ethiopia's economy is expected to grow by 9.5 percent this fiscal year ending June before accelerating to 10.5 percent in 2015/16, the World Bank said on Friday, adding inflation will remain in single digits during this period.
Tanzania: Current account deficit narrows by 16% (The Citizen)
The current account balance narrowed by 15.8% to a deficit of $4.295 billion in the year ending March 2015 compared with $5.102 billion recorded previously, the Bank of Tanzania (BoT) has reported. It said in its economic review for April that the improvement was mainly on account of an increase in exports of goods and services coupled with a decrease in imports of both goods and services. However, according to BoT, capital and financial account balances deteriorated, leading to the worsening of the overall balance of payments to a deficit of $460.2 million compared with a surplus of $192.2 million recorded in the corresponding period in 2014. [Download the monthly review]
Mbeki calls for money control (The Citizen)
Former president Thabo Mbeki said there was a need to strengthen the “legal and regulatory framework” to be able to deal with the problem of illicit financial outflows from Africa. Mbeki said countries such as Nigeria and South Africa should have the necessary legislation to be able to deal with the problem properly. “It is necessary for the countries to have the legislative framework which enables them to act to identify resources without impacting negatively on what will be normal and desirable econo-mic integration on the continent,” Mbeki said yesterday at the Pan African Parliament (PAP) ordinary session in Midrand, north of Johannesburg. [Download the speech]
Misgivings over DBSA loan (The Herald)
Government has formally engaged the Development Bank of Southern Africa for a $500 million loan to recapitalise the National Railways of Zimbabwe, the National Assembly has heard. Transport and Infrastructural Development Minister Obert Mpofu said Government will, however, continue to cast its net wide and court other investors because it is concerned with the cost of the DBSA loan. “Government has directed that even as we consider the DBSA package, we also step up efforts at any other options available, particularly from China,” he said.
Atlas of Africa’s energy potential (AfDB)
The overall objective of the Atlas is to graphically illustrate where the energy resources are, where the potential for expansion exists and possible impacts on the environment. It will provide visual information on the challenges and opportunities to providing Africa’s population access to reliable, affordable and modern energy services. The tasks to be carried out over a period of eight month, as part of the assignment include the following activities:
Innovation as a driver for sustainable development (UNDP)
The UNDP’s Innovation Facility has launched its Annual Review for 2014(link is external), showing why innovation is becoming increasingly important in international development and for UNDP itself. The Innovation Facility report finds that it was only together with entrepreneurial partners and by engaging people affected by development challenges that UNDP can find the next generation of catalytic solutions and reach the targets of the Post-2015 agenda.
Why East Africa tops regional mobile financial services (Business Daily)
There is an ongoing battle in sub-Saharan Africa, known as the convergence battle, to bridge a widening gap between mobile cellular penetration and access to financial services. While the former is almost hitting 70 per cent, the latter remains low at about 25 per cent of the adult population, according to IFC’s Global Financial Inclusion Survey. At the moment, East Africa seems to be winning the battle, as evidenced by two key indicators.
Harnessing digital trade for competitiveness and development: conference summary (World Bank)
The World Bank Group hosted some of the pioneers in this space for a full-day conference on Harnessing Digital Trade for Competitiveness and Development on May 19. Here, we heard entrepreneurial success stories—an online platform for jewelry in Kenya, a provider of software solutions in Nepal, an online platform for livestock trade in Serbia—and dove into the constraints and challenges of running a digital business in an emerging economy.
Development co-operation by countries beyond the DAC (OECD)
This issues brief, available to download in pdf format only, explains how the DAC has been engaging with providers of development co-operation beyond its membership - especially in the field of statistics - and gives an overview of their development co-operation flows. It also proposes greater collaboration among all bilateral providers to complete the picture of international development co-operation. The total gross development co-operation provided by 27 countries beyond the DAC reached USD 23.5 billion in 2013, up from USD 11.4 billion in 2010 (Table 2). As a percentage of total global development co-operation, this represented between 7% and 9% in 2010, 2011 and 2012, and increased to 13% in 2013.
President Mahama opens Oxford Africa conference today (Ghana Broadcasting Corporation)
Botswana: Farmers call for new beef markets (Daily News)
Luanda hosts Okavango River Basin Water Commission meeting (AngolaPress)
African peer review system fading fast (IOL)
Xenophobia increasingly regional (Zimbabwe Independent)
SE4All Action Agendas set stage for mobilizing investment in sustainable energy in Africa (AfDB)
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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Mbeki calls for money control
Former president Thabo Mbeki said there was a need to strengthen the “legal and regulatory framework” to be able to deal with the problem of illicit financial outflows from Africa.
Mbeki said countries such as Nigeria and South Africa should have the necessary legislation to be able to deal with the problem properly.
“It is necessary for the countries to have the legislative framework which enables them to act to identify resources without impacting negatively on what will be normal and desirable econo-mic integration on the continent,” Mbeki said yesterday at the Pan African Parliament (PAP) ordinary session in Midrand, north of Johannesburg.
South Africa already has legislation which enables it to identify what might be an illicit inflow.
“They should be able to pick up if there is any such money coming from Nigeria,” Mbeki said.
“I don’t know if Nigeria has similar legislation so that the countries can cooperate in dealing with this.”
PAP formally adopted Mbeki’s report on financial illicit outflows.
Mbeki, who chairs the United Nations high-level panel on illicit financial flows from Africa, said the report raised the matter of corruption by Africans.
“It will not say necessarily politicians, doctors, lawyers, or senior government are involved. It is very detailed. It is not propaganda.”
Economic Freedom Fighters MP Floyd Shivambu said the ultimate solution was Africa’s strategic ownership and control of its natural resources.
Mbeki called on African countries to pay closer attention to illicit flows from the commercial sector.
“It would also mean holding multinationals accountable for fraudulent practices by setting up requirements for their transfer of funds.”
However, Mbeki said most African countries did not have enough highly trained lawyers, accountants and tax experts to prevent or punish perpetrators.
Developed countries were keen to deal with illicit outflows. “The reason for it is because they see they themselves are losing billions of dollars through this,” Mbeki said.
Year-end profits of major corporations based in their countries “don’t come to London. They go to a tax haven somewhere”, he said.
Address of the TMF Patron, Thabo Mbeki, at the Pan African Parliament: Midrand, 21 May 2015
In 2011, the African Ministers of Finance, Planning and Economic Development, jointly convened by the African Union and the UN Economic Commission for Africa, identified these illicit capital outflows as constituting a major obstacle to our development efforts.
Accordingly they decided to form a High Level Panel to investigate and make recommendations about what Africa should do to stop these illicit financial outflows.
The Panel, which I had the privilege to Chair, started its work in 2012 and submitted its Report to the 24th Ordinary Session of the Assembly of African Union Heads of State and Government this January. The Assembly adopted the Report and its Recommendations.
By way of background, it is estimated that over the last 50 years, Africa lost in excess of $1 trillion in illicit financial outflows.
Our Panel further estimated that our Continent loses annually over $50 billion through these illicit financial outflows.
This estimate is based on data obtained from the International Monetary Fund Direction of Trade Statistics which, as Raymond Baker, Director of Global Financial Integrity explains, report annual exports and imports for all pairs of reporting countries.
The figure of $50 billion is therefore an underestimate as it excludes such elements as trade in services and intangibles, proceeds of bribery and trafficking in drugs, people and firearms.
As we have said, the African Ministers decided to investigate the matter of illicit financial outflows because of the immense developmental challenges which face the Continent.
For us to meet these challenges requires huge volumes of capital. Accordingly it does not make any sense that we should be exporting capital which should be retained within our Continent.
You will recall that later this year, the Millennium Development Goals, the MDGs adopted in the year 2000, will be replaced by the new Sustainable Development Goals. In this regard you know that many of our African countries did not achieve all these MDGs because of insufficient capital to finance the required actions.
You will also recall that to address this challenge of generating the resources to enable all countries to realise the MDGs, in 2002 the UN convened the International Conference on Financing for Development.
As you know, the next International Conference on Financing for Development will be held in Addis Ababa in July this year. It is clear that this time round the Conference will pay particular attention to the matter of domestic resource mobilisation to finance the new Development Goals.
Indeed in its Declaration on Illicit Financial Flows, the AU Assembly has expressed “the need to ensure that Illicit Financial Flows and their impact on domestic resources mobilisation is given the necessary attention by the 3rd International Conference on Financing for Development, and in this regard, stress(es) the need for robust international cooperation to address the problem.”
It is therefore obvious that particular attention will be paid to the issue of stemming the illicit financial outflows throughout the developing world. This will put pressure on all of us to act on this matter.
In this context we should take particular note of the observation made by the AU Assembly in its Declaration of Illicit Financial Flows concerning “the growing need for domestic resource mobilisation for the attainment of our continental development visions and goals particularly Agenda 2063 and the Common African Position on the post 2015 Development agenda, which both call for inclusive growth, sustainable development and social and economic structural transformation of Africa through optimal utilization of our natural resource endowments…”
In the context of everything I have said, it is necessary to keep in mind various specifics of our situation as Africans. The United Nations has estimated that the number of Africans living on less than $1.25 a day increased from 290 million in 1990 to 414 million in 2010. In addition, per capita GDP in Africa is one fifth, that is, 20 per cent of the global average figure.
In 2012 the gross capital formation rates in Nigeria and South Africa were 13 and 19 per cent respectively. The related figures for China and India respectively were 49 and 35 per cent.
And yet the African Development Bank and others estimate that Africa needs an additional $30 to $50 billion annually to address its infrastructure needs.
These statistics make the unequivocal statement that Africa needs large volumes of capital effectively to address the challenge of the eradication of poverty and underdevelopment.
It is precisely in this context that the imperative stands out that everything should be done to stop the illicit financial outflows which contribute so much to depleting the capital our Continent so urgently needs.
Accordingly, to indicate what needs to be done, our Panel on Illicit Financial Flows adopted the self-explanatory action slogan: Track it! Stop it! Get it!
Of central importance in this regard is the Finding our Panel made that the bulk of illicit financial flows from our Continent – 60 per cent and more – derives from the activities of the large commercial companies.
The second and third sources of these illicit outflows respectively are through criminal activities such as drug trafficking accounting for about 30 per cent, and lastly, corruption.
With regard to the latter we must explain that here corruption features in two contexts. One of these which we have just mentioned is the expatriation of corruptly acquired resources.
The second is corruption understood as the abuse of entrusted power to facilitate the illicit export of capital by others and therefore its prevalence throughout the various activities which represent the illicit outflows.
The second important Finding I must mention is that the outflows from Africa end up somewhere else in the world. Accordingly to stem these outflows requires cooperation and joint action among the originating and receiving countries.
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SE4All Action Agendas set stage for mobilizing investment in sustainable energy in Africa
African countries are one step closer to realizing the goals of universal energy access through following a coordinated approach to energy sector development at the country level according to speakers at a special session held during the Second Sustainable Energy for All (SE4All) Forum in New York.
During a high-level session on SE4All country action processes in Africa, representatives from the energy ministries of Ghana, Kenya, Rwanda, Tanzania and Uganda, presented their countries’ progress on SE4All Action Agendas and Investment Prospectuses, describing their vision and targets until 2030, priority actions, financing needs and investment opportunities. Progress made on these strategies will contribute greatly to future investment in the sector.
Speaking at the event, Alain Harelimana, Advisor to the Ministry of Infrastructure of Rwanda, noted that “The Action Agenda is as much a holistic planning tool encompassing our long-term vision as it is a framework to help align stakeholder objectives and partner interventions to mobilize necessary investments.” Uganda’s Minister of Energy and Minerals, Irene Muloni, stressed that Uganda’s SE4All Action Agenda is undergoing validation, while an Investment Prospectus is expected to be developed later this year.
To date, 44 African countries have joined the SE4All initiative, the majority of which have completed rapid assessments to determine the main challenges and opportunities in achieving SE4All objectives.
During the session, Daniel-Alexander Schroth, AfDB’s SE4All Africa Hub Coordinator, further stated, “The continent is making considerable progress on SE4All with 26 African countries developing SE4All Action Agendas, while 17 countries are in the process of developing SE4All Investment Prospectuses. These nationally owned documents provide a credible framework for mobilizing investments.”
A panel of public and private sector institutions from the European Commission, the United States African Development Foundation as one of the Power Africa partners, Standard Bank and the Global LPG Partnership highlighted the importance of energy sector reforms, credible planning frameworks, and recommended available financial instruments to assist countries in implementing their agendas and prospectuses.
The SE4All Africa Hub partners representatives opened the session, including Aboubakari Baba-Moussa, Director of Infrastructure and Energy, African Union Commission; Ruby Sandhu-Rojon, Deputy Director, UNDP Regional Bureau for Africa; and Prof. Mosad Elmissiry, Head of Energy Division, NEPAD.
The Second SE4All Forum, held in New York from May 18 to 21, brings together 1,500 experts from the government, private sector, civil society and development sectors.
About SE4All
Launched in 2011, the Sustainable Energy for All (SE4All) Initiative aims to ensure universal access to modern energy services, double the global rate of improvement in energy efficiency and double the share of renewable energy in the global mix by 2030. The SE4All Action Agenda is a country-level umbrella framework for energy sector development with a long-term vision, ensuring overall sector-wide coherence and synergy of the accumulated efforts towards the three goals. The SE4All Africa Hub is hosted by AfDB’s Energy, Environment and Climate Change Department, in partnership with the African Union Commission, the NEPAD Planning and Coordinating Agency, and UNDP.
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Minister Rob Davies: Trade and Industry Dept Budget Vote 2015/16
The fundamental goal of this Administration is to radically transform the South African economy in such a way that it promotes a higher level of more inclusive growth. This is the only sustainable way we will be able to achieve reductions in poverty; unemployment and inequality that we all agree are urgently required.
In identifying the path towards higher levels of sustainable growth, it is important to reflect on past experience. In the 84 quarters between 1993 and 2014, the South African economy grew at 5% or more in only 16 of these quarters. The growth in those periods was overwhelmingly driven by import intensive consumption and the now ended commodity super-cycle.
Neither of these factors will drive growth into the future. More importantly higher levels of inclusive and sustainable growth and radical economic transformation require that we bring about structural change that will do two main things: first, place our productive sectors firmly at the heart of a new growth path that will move us further up the value chain – and second, significantly broaden the base of economic participation. These two components together are what we understand as radical economic transformation.
The 7th iteration of the Industrial Policy Action Plan (IPAP) which we launched earlier this month seeks progressively to raise the impact of our interventions to support industrial development and the re-industrialisation of our country.
This is an exciting but challenging task. Since its inception, IPAP has had to contend with a global great recession and its lingering aftermath as well as with a number of strong domestic constraints. In these tough circumstances, its impact has been on a scale that has been less than optimal in relation to the demands of re-industrialisation in South Africa. That’s why it’s up scaling – as signalled in the President’s State of the Nation Address and nine point plans – has been identified as a key priority. For now though, it is important to note that in the challenges we have faced, in the global and domestic headwinds, some very significant successes have been achieved.
The overall diversity of the economy and many of its critical industrial capabilities have been retained; and a range of strong and viable policy platforms and programmes have either been built or strengthened.
The fact that South Africa continues to be seen internationally as an environment conducive to investment is reflected in the fact that the stock of foreign direct investment in South Africa is equivalent to around 45% of our GDP. Inward flows have continued to grow, and over the last five years South Africa has accounted for the bulk of new investment projects in Africa, with major investments arriving from the USA, the Eurozone and –increasingly significantly – from China, India and other Asian countries. In 2013 alone, over 130 foreign firms either entered South Africa or expanded their investments here – that is to say, about 3 firms per week.
In October 2014, The United Nations Conference on Trade and Development recognised TISA, one of the divisions of the dti, as the Global Winner for attracting investment in sustainable development.
The current pipeline of potential investment projects that we are monitoring and facilitating includes R 25.3 bn from foreign and R18.5 bn from domestic sources. Aggregating funding from both sources, it is expected that upcoming investments will likely be distributed as follows: R28.8 bn for the green economy; R7.96 bn for advanced manufacturing and R5.74 bn for mainstream manufacturing. Madam Speaker, our report on successes is evidence based. In the automotive sector, 2014 saw a rise in the volume of vehicles. Total vehicle production for 2014 amounted to 545 666 vehicles of which 276 404 were exported. In February this year, BMW South Africa celebrated the production of its one-millionth 3 Series sedan at the Rosslyn plant in Pretoria.
To use but one specific example of further investments; Mercedes-Benz South Africa expanded its production capacity in its East London plant by investing R5.4 billion in plant and equipment creating 550 direct and 400 indirect jobs. In support of this expansion, component manufacturers in East London invested approximately R1, 3 billion in plant, equipment; and building infrastructure to support the production of the new C Class, and in the process creating 800 new jobs. Let me emphasise again: These investments would not have happened without focused government support, its commitment to partner with the private sector and the increasing impact of its industrial policy.
To reinforce these points, allow me to dwell for a moment on a particularly illustrative case study – that of the Clothing, Textiles, Leather and Footwear sector.
Not so long ago, the demise of this sector was regarded as a foregone conclusion. In this House, we heard some members imploring us not to support what was seen as a lost cause. So-called “soft touch industrial policy” was cited as the way to go – in other words, abandon support for sectors which were for one reason or another experiencing difficulties.
I am glad government chose to ignore those views; and I am equally happy to say that during the past few years we have been able to report on both the steady competitiveness improvements that have taken place across the sector and the many jobs that have been saved and created, particularly in KwaZulu-Natal and here in the Western Cape.
the dti’s Clothing & Textiles Competitiveness Programme has, since its inception, been aimed at supporting change in the CTLF manufacturing sector to enable it to stabilise and grow.
Let me give you a sense of the most important numbers in a review of the CTCP recently conducted by the IDC.
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As at 31 March 2015, a total of R 3.7 billion had been approved under the programme, of which R 2.6 billion had been disbursed since inception in 2010.
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The share of employment in the sector by companies drawing on the CTCP has increased from 28.8% in the base year of 2009 to 38.7% in 2014. The Manufacturing Value Addition (MVA) increase attributable to the CTCP between the base of 2009 and 2014 is R 3.9 billion (exceeding the disbursements by 50% or R 1.3 billion). By contrast, the overall non-CTCP sector experienced declines in output and value added over this same period.
I can also confirm that we have made good on my promise to this House last year that we would be launching a significant programme to increase value addition in the exotic leather and animal hide industries through the National Leather Cluster. This cluster has now been established at the Vaal University of Technology and is up and running. Its work will be directly responsible for the creation of 2,000 sustainable jobs and a reduction of R1.4 billion in the trade deficit through import replacement by local retailers.
The full benefits of all the CTCP interventions will only be realised in the medium to long term. But even in the short term, the data is conclusive:
- CTCP interventions have already demonstrably contributed to improved overall competitiveness, sustainability and employment growth for its recipients.
And here’s the clincher:
- At a cost to date of R2.6 billion disbursed, the CTCP has facilitated the creation of R3.9 billion of additional MVA as well as saving over 68,000 jobs and achieving a total net gain of 6, 900 new jobs.
CTLF is just one of the major areas of the dti intervention. As you know, we spread the net much wider. And in this regard I’m pleased to report that one of our continuing flagship incentives offerings, the Manufacturing Competitiveness Enhancement programme or MCEP, has continued to perform very robustly. Since its inception, just three years ago this month, it has provided support for a total of 236 projects across a wide range of sectors – with an investment value to date of R3.8 bn and the maintenance of an estimated 28, 000 jobs.
At the same time, it is worth noting that our central emphasis on manufacturing does not by any means exclude interventions in key employment-creating service sectors: most notably Business Process Services and the local film industry.
the dti’s contribution to the Business Process Service sector has to date produced some outstanding results. To use but one example, In the first 3 months after being revised and re-launched, Business Process Service incentives were the critical catalyst for recent new investments by MTN Group Management Services and Full Circle Contact Services totalling R16.3 billion and creating an estimated 6, 300 jobs over a five-year period.
Our film and video sector, to borrow a phrase from social media. “is trending”. In the past financial year alone, the industry contributed R3.5 bn to the economy, whilst supporting 25, 000 jobs. The Film and Television Production Incentive underwrote 137 film productions.
There is a clear correlation between the growth in the number of local films that have been released at local cinemas and the introduction of the dti Film Incentive. In the ten-year period between 1990 and 1999, only 34 local films were screened at local cinemas countrywide. In the decade following, this number grew by 129%, to 78 films screened across South African cinemas. (An average of 7.8 new films a year).
However, in the much shorter four-year period between 2010 and 2013, the number of South African-produced films screened at local cinemas rose to 91 – or an average of 23 new films a year. This spectacular growth curve is the clearest possible evidence of the positive impact that the adjusted Incentive Programme has had on the local film industry.
We are now truly on the global film production map, with an impressive recent record of international films, TV series, documentaries and commercials.
Building on this momentum to support local film makers, the dti recently launched a R1 million-threshold South African Emerging Black Film-Makers Incentive Programme. This will tap into an exciting pool of young talent that up to now has encountered many obstacles to realising its full creativity. In ten years’ time, we may be looking at a whole new wave or genre of home-grown films that express authentic South African imaginative realities in ways that we have not yet dreamed of.
Time constraints do not allow for a fuller report on the comprehensive range of the dti activities. However I wish to report in summary that besides what has already been mentioned, this department was involved in a R3 billion new investment by Unilever South Africa and a new Atlantis-based manufacturing facility for components for the wind and solar industries by the Spanish company Gestamp. Other green energy production facilities established were Jinko Solar, SMA Solar Technology and Agni Steel in Coega. In September we launched a R100 million gold loan scheme to support jewellery manufacturers.
In the same month a R1.2 billion glass furnace bottling facility was unveiled by Nampak, supported by governments 12i Tax Allowance Incentive Programme.
On the agro-processing front, just to take one example: in December 2014 Abagold Limited, a local Hermanus-based company that farms abalone announced a significant expansion with support from the dti Aquaculture Development and Enhancement Programme As the company CEO reported at the time:
“The investment in the project is budgeted to a total sum of R112 million and we have already received R5.6 million on our first claim from the dti. Our maximum production per annum used to be 275 tons of abalone, and with the new project, it will grow to more than 500 tons per annum.”
20-Year old Kwanele Tom, who is employed on Abagold’s Sulamanzi farm, adds “Since I joined the company I have learned how to work with abalone and would like to attend the aquaculture training course and other skills training courses. I want to grow with the company.”
I have provided examples of some, though far from all the successes that can be attributed to the work of the dti, with the invaluable support of the IDC and our partner departments in the Economic Cluster.
I have done so to make the point that the current iteration of IPAP not only seeks to build on and enhance these successes, but to provide clear evidence in support of our confidence that these successes can and will continue and deepen. On the contrary, on the basis of what I have already outlined today, it is clear that the substantive issues for inclusive growth in South Africa are, in reality, the following: Firstly: the need for a higher impact, scaled-up industrial policy across other sectors – including stronger incentive packages and tighter conditions for recipients of funding – and with a particular focus on support for key “champion” or winning firms in sectors where SA already enjoys competitive advantages or where potential competitive advantages could be leveraged or new production capabilities gained. Secondly: the need for government, SOCs and the private sector to build a stronger set of working relationships to jointly unlock the opportunities and overcome the constraints that have continued to inhibit the growth of the manufacturing sector. Thirdly: the need for increasingly “joined-up” government, where both policy coherence and programme alignment support a “laser-focused” national industrial effort; including intensive work with global and local OEMs, export promotion programmes and enhanced support for Export Councils.
Finally, as we look ahead, we commit ourselves to moving forward on the basis of the five key pillars of industrial development that we have identified in IPAP 2015:
These are:
Firstly, Infrastructure-driven industrialisation ensuring that the very substantial infrastructure build programme supports local industrial development
Secondly, Resource-driven industrialisation aimed at leveraging the mineral resources endowment to support higher levels of downstream beneficiation and value addition, whilst systematically building up both the demand and competitive advantages South Africa enjoys in the upstream mining, transport and capital goods sectors. Allow me to provide you with one example of this work. Significant industrial development opportunities are emerging in the form of clean energy and mineral beneficiation linked solutions utilizing key SA mineral resources. Fuel cells are one of these representing an exciting window of opportunity for SA to enter and potentially lead in this new high tech resource dependent industries leveraging our PGM endowment, existing fabricators and R&D initiatives. Major platinum mining companies see fuel cells as a possibility to offer growth opportunities for the industry where the continued development of the platinum market is required to ensure long-term sustainability.
In 2015/16, the dti will focus intervention on a multi-faceted and structured approach covering demonstration and market development to increase demand and catalyse the development of the value chain in SA. Investment promotion initiatives to secure potential financing with key technology partners and in collaboration with local R&D initiatives will be key.
In the second quarter of 2015, Impala Platinum in collaboration with the dti and IDC will start the development of a 1.8MW hydrogen-fed fuel cell power solution at their Springs refineries marking the largest single site installation of hydrogen fuel cells in the Southern Hemisphere. These cells will be fuelled from hydrogen off the pipeline supplied by Sasol and Air Products. Impala envisages this to be followed with the execution of a larger installation with the ultimate goal of moving the refineries off-grid. Implats is working closely with local companies as well as a Japanese fuel cell manufacturer and believes there is an opportunity for fuel cells to be locally manufactured.
These exciting fuel cell developments and opportunities is evidence of the need to fast track this potential industry requiring coordinated government effort and strong partnerships between the private and public sector to develop and grow the market and supply chains in SA and the region.
The third pillar is Advanced manufacturing-driven industrialisation
This means, as I have already indicated, a continued focus on key sectors of the manufacturing economy which upgrade the capabilities of the economy as a whole. We need to engage particularly intensively with global OEM’s in these sectors and develop robust conditionalities for public sector support so that growth of the sector achieves our developmental objectives.
It also includes on-going work, not yet completed, to build an integrated system of industrial financing, incentives and export support with a special focus on lead and dynamic companies that can compete effectively in export markets; and, finally, it encompasses a strong commitment to support emerging black industrial entrepreneurs.
Fourth pillar: Procurement
This focuses on strengthening the localisation of public procurement, building on the lessons learnt through the implementation of various policy instruments over the past few years. It includes securing compliance with procurement prescripts in the public sector, training and capacitating public sector institutions for strategic sourcing and supplier development and leveraging other policy instruments such as incentives to support the development of domestic manufacturing capabilities. the dti has designated 16 sectors, subsectors and products for local procurement. When I launched IPAP 2015 I announced further designations for local procurement in the following product areas: transformers, power-line hardware and structures, steel conveyance pipes, mining and construction vehicles and building and construction. In the case of the last sector, the first round of construction material designations include cement, fabricated structural steel, pipes and fittings, sanitary ware, glass, frames and roofing materials. This means that in the 645 infrastructure projects across the country valued at R3.6 trillion the state must procure the types of products listed above (and other products previously designated) from local manufacturers.
This is the strongest signal to date that government intends deploying industrial policy instruments where it believes it can achieve maximum leverage to support industrial development and job creation.
Fifth and final pillar: Regional economic integration
This centres on maximising the opportunities presented to the domestic economy by a growing market on the African continent, driven by high growth in the region, strong consumer demand, infrastructure development and resource exploitation.
The opportunities are significant, and must be energetically leveraged by unblocking obstacles to expanded regional economic trade and crafting clearly-defined programmes of complementary regional industrial development and value chain integration.
As we have in the past, we will continue to work actively to position South Africa as a competitive and attractive destination for FDI, particularly in value added activities.
In line with these positive outcomes and, my previous reports to this House that we will continuously and consistently seek to improve service delivery even where we are doing well, I am glad to announce today that we will soon be opening a dedicated Investment Promotion Unit and Inter-departmental Clearing House as announced in the President’s State of the Nation Address. Specific details of this enhanced investor support facility will be provided in the near future but we intend to provide greater resources to establish a one-stop shop for investor support, regulatory matters, investment financing and immigration matters. In future investors can expect more and better with regard to aftercare, expansion and retention. The unit will have a specialist focus and skills set for unblocking bureaucratic obstacles, red tape reduction, and administrative barriers and will improve Governments service and response to investors.
The establishment of this Unit will also assist in marketing our SEZs, about which I spoke at length in my input to the NCOP budget vote debate yesterday.
South Africa has been playing a prominent role in championing developmental integration in the regional economic communities we are members of and in the AU. The Tripartite Free Trade Area (T-FTA) that will be launched at a Summit in Sharm el Shaik next month will signal that we are on track to create a market of over 600 million people with a combined GDP of over $1trillion. Later in the same month, in South Africa negotiations will be launched for the establishment of a Continental FTA that will embrace the entire continent – a market of 1, 3 billion people with a combined GDP of over $2trillion.
These developments follow the extra-ordinary SADC Summit held last month which approved a SADC Regional Industrialisation Strategy and Roadmap. South Africa strongly supports regional and continental efforts to build more industrialised and diversified economies and reduce Member States' over-dependence on primary products.
Members may be aware that the US Senate has now passed a Bill that provides for AGOA to be extended for a period of 10 years and for South Africa to be included. New provisions in the Bill however strengthen the conditionalities that will apply and clearly seek to chart a course “to transform the relationship between the US and Africa from non-reciprocal concessions to reciprocal agreements. In addition, the Bill provides for regular reviews of African countries’ trade and investment policies with an emphasis on the openness to US products, and in the case of South Africa, such a review is scheduled to be held within 30 days of the enactment of the Bill.”
Notably absent, although indicated at an earlier stage as a possibility, is any improvement in the level of access of AGOA eligible countries’ products to the US market.
Agoa commitments remain important to sectors such as autos, chemicals and some agriculture, and agro processing and Government is working hard to remain a beneficiary of Agoa mindful of the 30 day out of cycle review to which we will be subjected. However, the reality is that with the many new conditions and changing dynamics of US trade policy, the value of AGOA is diminishing while its costs are rising. I will raise the matter for discussion in Cabinet in the near future.
The limited time I have today precludes any substantive reporting on our very important legislative programme. In the coming year we will however depend on your wisdom to assist us in the passage of key pieces of legislation such as the Promotion and Protection of Investment Bill, the Copyright Amendment Bill, the National Gambling Amendment Bill and the Liquor Amendment Bill
All the work I have been discussing is underpinned by the efforts of related development finance and regulatory bodies – namely, the Industrial Development Corporation, the National Empowerment Fund, the Council for Scientific and Industrial Research and the dti’s technical infrastructure institutions – as well as the cooperation of those SOCs that occupy a central place in our industrialisation effort. To the staff of all these institutions and to our own dedicated the dti people – on whom all this work rests – I offer on behalf of government as a whole our sincerest appreciation.
The work of the dti is also supported by the oversight of the Parliamentary Portfolio Committee and the Select Committee of the National Assembly and the National Council of Provinces. To the Chairpersons, the Hon Joan Fubbs and the Hon Eddie Makue, as well as honourable members of the Committee, I express my sincere appreciation for your support.
All the work of the dti is also supported by the Ministers and Departments of the Economic Sectors and Employment and Industrial Development Cluster. Allow me to also express my sincere appreciation to these Ministers and their respective departments.
We re-affirm our common goal of taking the inclusive industrialisation of South Africa to a new and higher level.
I thank you.