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DHL expectations for Africa: 2015 outlook
DHL expects 2015 to be a year of growth for the logistics industry on the African continent
In line with Sub-Saharan Africa’s (SSA) projected economic growth of 4.9% this year, which is double the projection for advanced economies (2.4%), DHL SSA expects 2015 to be a year of growth for the logistics industry on the African continent, largely driven by increased consumer demand and the rapidly developing e-commerce industry.
This is according to Charles Brewer, Managing Director of DHL Express SSA, who was commenting against the backdrop of Deutsche Post DHL Group’s full year results released in March. DPDHL Group ended 2014 with revenues of EUR 56.6 billion, up 3.1% compared to 2013. He says that the company’s increased focus on e-commerce and emerging markets, including Africa, has led the group to achieve growth in both volume and revenue in 2014.
A new report by yStats.com revealed that despite Africa lagging behind other regions when it comes to the development of online infrastructure, business-to-consumer (B2C) sales will grow to double-digit numbers in EUR billions in the next three years.
Brewer says that as such, a key focus for DHL Express Sub Saharan Africa in 2015 is to further strengthen connectivity, both within the continent and globally. He says that this will be crucial to meeting the growing e-commerce market on the continent, and assist in driving further growth.
“There is a growing B2C e-commerce market in Africa due to the development and accessibility of technology on the continent, so it is no longer just the larger corporations that need to make use of logistics and delivery services, but individual consumers and small businesses too. Our goal is to develop the necessary infrastructure in Africa to make the global market more accessible. Our aggressive expansion strategy has seen us grow our retail presence from 300 outlets to over 3,800 outlets in just over 3 years.”
Brewer believes that intra-African trade will continue to grow in 2015, and continue to improve on the growth witnessed by the group in 2014. “There are a number of successful trade blocs in place which focus on better connecting the region. A good example of this is the recent and rapid progress made by the East Africa Community (Kenya, Uganda, Tanzania, Rwanda and Burundi) who are working incredibly hard on developing a number of critical and trade boosting areas, for example, they are working to improve the roads, ports, rail and critically, the customs border environment and have recently introduced a common visa for the region. The Economic Community of West African States (ECOWAS) and The African Economic Community (AEC) are other prime examples,” adds Brewer.
Brewer points to International Data Corporation (IDC) statistics, which predict that closer intra-Africa trade will be witnessed in 2015, promoted by ICT initiatives such as payment systems, financial inclusion initiatives, and cross-border payments.
“While markets within Africa offer numerous opportunities, there are also challenges. Underdeveloped infrastructure, lack of air connectivity and customs inconsistencies remain very real issues that can hamper growth on the continent. With that said, the situation is improving, and more countries are recognising that they need to find ways to make their markets accessible and easier to do business with. We will continue our aggressive investment and expansion strategy on the continent, with a number of planned upgrades scheduled for 2015, including state of the art smartphone scanners to further enhance our tracking capabilities.”
“We firmly believe that Africa is the place to be and that it offers unlimited growth opportunities. We aim to drive this growth with strategic investments and programs that will make the global market more accessible. We are committed to connecting Africa to the world, and the world to Africa,” concludes Brewer.
Distributed by APO (African Press Organization) on behalf of Deutsche Post DHL.
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Non-Tariff Measures and Regional Integration in the Southern African Development Community
This note provides an overview of the state of play of the political process on NTM policies in the SADC region and presents a non-technical summary of methodologies to assess the regulatory distance between members of a free trade agreement and the potential greater economic benefits from reducing NTMs. The note also contains a discussion of the potential way forward in the SADC region on NTMs.
It was prepared under a joint project of the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and the United Nations Conference on Trade and Development (UNCTAD), Assessment of NTM’s Potential for Regional Integration in SADC Region.
The purpose of the project was to develop a strategy and to conduct preparatory work to support deep regional integration by systematically addressing non-tariff measures (NTMs).
This note is based on three papers that were prepared under the project:
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Erasmus and Viljoen (2014) provide an analysis of the state of play of the political process on NTM policies in the SADC region and identify stumbling blocks for implementation.
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Cadot et al. (2015) develop quantitative and qualitative methodologies to assess the regulatory distance between members of a free trade agreement and to identify potential areas of deep regional integration in merchandise trade with respect to NTMs; they also quantify the ad valorem price effects of NTMs and develop a methodology to identify particularly harmful NTBs.
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Vanzetti et al. (forthcoming) assess the potential greater economic benefi ts from realizing deep integration.
The UNCTAD-SADC-GIZ Workshop on Non-Tariff Measures “Deep” Regional Integration on 12 August 2014 in Gaborone, Botswana, aimed to validate the studies and to contribute to the development of a strategy to support the political process of harmonizing or reducing NTMs in the SADC region.
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Statement by Mr. Sindiso Ngwenya, Secretary General of COMESA at the 18th COMESA Summit of the Heads of State and Government
At the very outset I would like to thank, Her Excellency, Dr Nkosazana Dlamini Zuma, Chairperson of the African Union Commission and the entire Commission for providing free of charge the African Union conference facilities and logistical support services for this Summit and the meetings that preceded this Summit. This gesture is further confirmation, if any was needed, of the illustrious leadership that our Chairperson has provided and continues to provide to Regional Economic Communities in Africa that are building blocks for the realization of the African Economic Community. I have no doubt that under your leadership and support we shall realize in the short term the Continental Free Trade Area (CFTA) and the milestones in the African Union Agenda 2063.
The founding fathers of COMESA were conscious that COMESA should contribute to the integration of African markets by explicitly providing in Article 3(f) of the COMESA Treaty that COMESA shall “contribute towards the establishment, progress and the realization of the objectives of the African Economic Community”.
I would be remiss in my responsibility if I did not acknowledge the role played by the Joint Secretariat of the African Economic Community that comprises the African Union Commission, the African Development Bank and the United Nations Economic Commission for Africa. It is thanks to the individual and collective leadership of their Excellencies, Dr Nkosazana Dlamini Zuma, Chairperson of the African Union Commission, Dr Donald Kaberuka, President of the African Development Bank and Dr Carlos Lopes, Executive Secretary of the United Nations Economic Commission for Africa that we are witnessing a renaissance and golden age in regional integration in COMESA in particular and Africa at large.
The year 2015 is important in the calendar of your organization in that when the COMESA Treaty came into force in December, 1994 in Lilongwe in Malawi it was envisaged that a fully functioning Common Market would be in place this year. In addition, it is twenty years since COMESA was established.
Having come this far, it is time to reflect on what Member States have individually and collectively achieved. An all encompassing review on the operations of Common Market clearly demonstrates that COMESA is unique in that it has autonomous and semi autonomous financial and technical institutions that on a daily basis provide services to governments, quasi government institutions and the private sector. When account is taken of the contribution of these Institutions, COMESA emerges as a formidable organization for social and economic transformation. I will highlight the role and impact of these institutions later on during my intervention.
Trade in Goods and Services
On market integration through trade liberalization, COMESA was the first regional economic community in 2000 to launch a Free Trade Area that is duty and quota free. Traditionally we have reported on trade and goods which exclude trade in services. This does not give us a complete picture and appreciation of the scope and depth of market integration through trade in goods and services.
With respect to trade in goods, the volume of trade has increased from United States Dollars 3.2 Billion in 2000 to 22.4 Billion United States Dollars in 2014. This remarkable seven fold increase confirms that the COMESA trade regime is working. This trade does not include informal cross border trade which is estimated to be thirty percent of total trade within the COMESA region. Although there has been a seven fold increase in trade among member States, this still accounts for about 10 percent of trade with the rest of the world.
An analysis of the potential trade within COMESA by the Secretariat in 2014 revealed that annually the region imports United States 97 billion worth of goods that are produced and traded within the region. The sectors with the highest trade potential are in textiles, wooden furniture, household items, leather products, white and red meat to mention but a few. This suggests that the COMESA region does not have the supply side capacity. The implementation of the COMESA industrial policy should go a long way towards developing the supply side capacity, either through increased utilization of installed industrial capacity or new investments.
Trade in Services
The services sector is critical for COMESA economies in that services account on average for more than 50 percent of the region’s Gross Domestic Product. Trade in services with the rest of the world and within COMESA is dominated by transport, communications, insurance and government services. This excludes non tradable services such as hair-cuts and domestic health services.
In 2013 the total value of import and export trade within COMESA and the rest of the world was United States Dollars 76 Billion, of which imported and exported services were United States Dollars 41 Billion and 35 Billion United States Dollars respectively.
The Secretariat working with appropriate national institutions is in the process of breaking down the global figures of trade in services with a view to reporting on trade in services among member States. In future, we shall report on both trade in goods and in tradable services. This will give an accurate picture of the both trade in goods and tradable services within the Common Market and its impact on employment and economic growth.
COMESA, EAC and SADC Tripartite Free Trade Area
The decision you took in Munyonyo, Uganda in October, 2008 at the first COMESA-EAC-SADC Summit to establish the Grand Free Trade Area from Cape to Cairo marked a turning point in regional integration in Africa. The Tripartite process is now a catalyst for the establishment of the Continental Free Trade Area by 2017.
The Tripartite FTA consisting of 26 countries, which is almost half the membership of the African Union has a combined population and Gross Domestic Product of 625 million people and US$1. 3 trillion respectively will constitute the single largest market. It is also worth noting that the combined gross domestic product of the Tripartite countries accounts for 62 percent of the continent’s Gross Domestic Product and that the Tripartite FTA will provide a basis for the structural transformation of the economies through Industrialization and value addition.
Your Excellencies, in my capacity as the Chairperson of the COMESA-EAC-SADC Tripartite Task Force of Chief Executive Officers and on behalf of my colleagues Dr. Stergomena Tax, Executive Secretary of the Southern African Development Community and Dr. Richard Sezibera, Secretary General of the East African Community, I am happy to report that after two and half years of intense negotiations, the COMESA-EAC-SADC Tripartite Sectoral Ministerial Committee held in Bujumbura, Burundi in October 2014 agreed that sufficient consensus had been reached to launch the Tripartite FTA. The Tripartite Summit of Heads of State and Government to be hosted by Egypt in Sharm El-Sheikh will now launch the Tripartite FTA Agreement on goods.
Economic Transformation
The COMESA Treaty and its protocols contains strategies and policies of what Member States should do at the national level and regional level implement programmes for the realization of economic transformation. Economic transformation involves rationalization of economic structures by moving human, financial and other resources from low to high value added economic activities. For example, economic transformation manifests itself within sectors both in labour intensive manufacturing to capital and technology intensive manufacturing and between sectors such as agriculture to labour intensive industrial activities. Some of the main prerequisites for social and economic transformation are macroeconomic and structural policies.
Industrialization and Competitiveness
The low levels of intra-COMESA trade which is 10 percent of total trade with the rest of the world is primarily due to lack of industrial diversification and product complementarity. It was against this background that you directed during your last Summit in Kinshasa, DR Congo that a common industrial policy be developed.
I am happy to report that the Secretariat working together with Member States has been able to implement your directive and come up with a common industrial policy. Among others, the common industrial policy recognizes that inclusive and sustainable Industrialization requires strategic collaboration between the public and private sector; national and regional value chains; local content policies; the need to establish institutions and processes that promote strategic collaboration between the government and the private sector to address market failure; the quality of the business environment and economic policy coordination at the national and regional levels. In addition, the successful implementation of the common industrial policy will require not only sound macroeconomic policies but also microeconomic policies.
Some of the lessons that have been learnt from the emerging industrializing economies is that there is a need to avoid a blue print approach, in other words a one size fits all approach to Industrialization. This is because Industrialization can be based on labour intensive industries, natural resources through value addition and diversification from low value to high value services.
Agricultural Development
I am happy to report that on agriculture development, COMESA Member States are implementing the African Union Comprehensive Africa Agriculture Development Programme, which has seen Fourteen (14) out of the Nineteen Member States signing CAADP national compacts. In addition, Eight (8) Member States have successfully designed and fully costed these National Agricultural Food, Security and Investment Plans and have been able to access funding of US$253 million from the Global Agriculture Food Security Programme and other sources. Despite the progress made, the region still spends $22 billion annually to import food. This underlines the need for Member States to embark on agricultural Modernization which is aimed at:
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Generating demand for agricultural infrastructure (machinery and equipment);
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Stimulating research and development institutions to assist in refining models of appropriate Agro industrialization programmes;
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Freeing surplus unemployed industrial labour for active Industrialisation Programmes; and
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Enhancing the domestic market for industrial products and potentially increasing export products to support and finance inputs required for agricultural transformation.
Infrastructure and Energy
In recent years, the region had witnessed the implementation of infrastructure and energy projects, thanks to the substantial funding from the African Development Bank, other multilateral financial institutions and from cooperation and development partners. However, the largest amount of funding has been as a result of the innovative mobilisation of funding by Member States through infrastructure and diaspora bonds that have been issued at national, regional and international levels.
It is estimated that in the past twenty four months about US$16 billion has been mobilized for infrastructure and energy projects by Member States. The bulk of this funding from bonds has been in Egypt for the new Suez Canal, which raised US $9 billion within nine days for a bond initially floated for thirty days and Ethiopia for $4 billion for the 6000 megawatt Renaissance Dam which is funded from domestic market and the diaspora bond. It is interesting that in the case of the Ethiopian hydro power project, other countries in the region have been invited to take shares in the project.
These few examples among many, demonstrate that the region has come of age and that gone are the days when successful implementation of mega infrastructure projects could only be realized when the global financial markets considered the projects viable on the basis of their policies and qualifying criteria.
COMESA Financial Institutions
In my earlier remarks I did mention that COMESA is unique in that it has autonomous financial and non- financial institutions that support regional integration. In this regard, the COMESA financial institutions, namely the PTA Bank, the Africa Trade Insurance Agency, the COMESA Clearing House and the PTA Reinsurance Company with a combined asset base of more than $3.2 billion have significant financial power which has facilitated billions of investments in trade and project financing. It is interesting to note that these financial institutions work in a complementary manner in addressing the requirements of the private sector and that they have also been able to intervene in Member States where there has been market failure.
In addition to the financial institutions, COMESA has established the COMESA Competition Commission which is assisting Member States in the financing of national competition programmes and capacity building. Since it started operating on 17th February 2013, the Commission has made assessments of Sixty Six (66) mergers and acquisitions which have taken place in the Common Market with a total transaction value of $58 billion. This demonstrates that the private sector both from within and outside the region is active in investing in manufacturing and services sectors.
Some of these institutions established by COMESA are now Pan African Institutions in that they provide services to the entire African continent and beyond. In the case of the Africa Trade Insurance Agency, which provides credit and political risk insurance, the Fifteen (15) Member States of the Economic Community of the West African States have agreed and are in the process of taking up membership in ATI. In the case of the PTA reinsurance Company, 60 percent of the reinsurance businesses they underwrite is from COMESA Member States and the rest from Africa and Asia, such as Nepal.
The following COMESA institutions provide technical and advisory services to both Government and private sector: Regional Investment Agency, FEMCOM, COMESA Leather And Leather Products Institute, COMESA Business Council, COMESA Monetary Institute, the East African Power Pool, the Alliance for Commodity Trade in Eastern and Southern Africa and the Council of Bureau on the Yellow Card.
I once again wish to register my profound appreciation to Your Excellencies for affording me the opportunity to lead this Regional Organization whose origins dates back to 1978 when the Lusaka Declaration of Intent on the Establishment of Preferential Trade Area for Eastern and Southern African States (PTA) was signed by Ministers of Economic Planning and Trade.
Over the years you have given counsel and strong leadership which has seen your Organization grow into a dynamic and results oriented institution as I serve my few remaining years,
I wish to reiterate that I will with your collective guidance continue to work tirelessly towards the realization of the noble ideals and objectives of the Common Market.
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Joint AUC/ECA Conference of the African Ministers of Finance, Planning and Economic Development opens with focus on Agenda 2063
“This meeting is taking place at a critical time for Africa when the need for integration is paramount for Africa,” said the AUC Chairperson, Dr. Nkosazana Dlamini Zuma during the opening on 30 March 2015 of the Eighth Joint Annual Meetings of the African Union Specialized Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration and the Economic Commission for Africa Conference of African Ministers of Finance, Planning and Economic Development, holding at the Conference Hall of the UNECA in Addis Ababa, Ethiopia.
The AUC Chairperson reiterated the notion that even though some people may look at the Agenda 2063 as ambitious there is no harm in being ambitious given that the implementation of this agenda is doable. She therefore called on all Member States to invest in their people’s skills development so that they can usefully contribute to make Agenda 2063 a reality as this will better the lives of the African citizen.
Dr. Dlamini Zuma recalled that 2015 is the “year of women empowerment”, therefore the need to recognise the work of women in different fields including the agriculture sector, education, infrastructure etc., underscoring the need to increase financial support to women so as to empower them since they encompass the majority of the population.
Mr. Paul Kagame, President of the Republic of Rwanda in his opening speech called on regional collaboration to build relevant and sophisticated systems to manage African financial resources. President Kagame underscored that a unified Africa will be achieved faster with collaborative efforts on integration by increased forces in the application and domestication of political will by AU Member States. He called on the involvement of the private sector to work with the governments in planning and implement the AU development agenda.
Dr. Sidi Ould Tah, Minister of Economic Affairs and Development of Mauritania on his part said, industrialization should be prioritized. He called on the Members States to improve their capacity to mobilize internal and external resources.
Mr. Carlos Lopez, Executive Secretary of the UN Economic Commission for Africa, recognized the strategic importance of partnerships between the Economic Commission for Africa, the African Development Bank and the African Union which he said has influenced high levels of policy formation in support of Africa’s transformation. Mr. Lopez emphasized on the need for diversification of economies in Africa with key focus on industrialization as the vital structural transformation Agenda of African economies.
“The time has come for us to awake. Africa’s current trade policy plays a major role in our inability to excel,” said the Executive Secretary of the ECA.
Mr. Hailemariam Dessalegn, Prime Minister of Ethiopia urged for increased reliance on domestic resources and the need to step up efforts to finance and utilise diverse sources of financing. He called on governments to effectively utilise diverse sources of financing for economic development.
Addressing the delegates he said that the international private sector will help with delivery of skills and infrastructure. He invited the international community to support Africa’s agenda of economic self-sustainability.
The ministerial meeting ends on Tuesday 31 March 2015.
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South Africa citrus growers skirt Spain over disease dispute
South Africa, the world’s biggest orange exporter after Spain and Egypt, will avoid citrus shipments through Spanish ports to avert a possible ban after authorities there refused producers permission to inspect testing facilities for black-spot disease.
The fungus, which affects some South African produce, causes blemishes on the peel of the fruit, which accounts for about 40 percent of citrus imported by the EU. The nation’s Citrus Growers Association is disputing findings by the European Food Safety Authority that the disease can survive transport and storage and could establish in EU regions.
South Africa had to halt exports to the region last year after EU authorities intercepted 16 shipments with black-spot-affected fruits.
The association sent an expert to Spain to inspect the testing methodology after the interceptions, and he was refused access, CGA Chief Executive Officer Justin Chadwick said by phone March 26.
“He was allowed to look at all the Netherlands’s facilities and all the things in Germany,” Chadwick said. “That was an immediate red flag regarding the risk of sending any of the fruit to those ports,” he said, referring to Spain.
The Spanish Agriculture Ministry didn’t respond to an e-mail or call seeking comment. The EU in March 2013 said it would consider measures against citrus from South Africa if more than five cargoes with black spot were found in the same export season.
Concerns ‘Misplaced’
The EU’s concerns over black-spot transfers are misplaced, South African Trade and Industry Minister Rob Davies told reporters in Johannesburg Thursday.
“Science does not unambiguously support the view that these black spots can be transmitted,” he said. “There are other drivers of this and they are linked to commercial interest.”
The nation’s citrus and related industries employ about 60,000 people, Davies said.
The first shipments of citrus from South Africa this season are heading for the EU now, Chadwick said. Volumes will rise from May, he said. South Africa exported 115 million 15-kilogram (33-pound) cartons of citrus worldwide last year even though it halted EU sales in September to avoid a possible ban by the 28-nation bloc over the black-spot fungus, Chadwick said. Most shipments to the EU are destined for the northern regions, where there are no citrus orchards, he said.
The country will probably ship less citrus in 2015 than last year because of the decline of the ruble in Russia, which accounted for 12 percent of 2014 volumes, Chadwick said. Russia has this season ordered 50 percent less than what it typically does from Morocco, he said.
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Ghana: Agreement to combat fiscal fraud signed with the Netherlands
Ghana and the Netherlands have signed a memorandum of understanding (MoU) for the automatic exchange of tax information in order to avoid and combat fiscal fraud, and to ensure tax compliance.
The purpose of the agreement was to assist the Ghana Revenue Authority (GRA) in its development toward a modern tax and Customs administration, in accordance with international standards as developed by international tax institutions.
The agreement will allow the tax authorities of the two countries to automatically provide each other with information about income from immovable property earned by residents of each country, dividends, interest, directors’ fees, and income of artists and sportsmen.
It is the first to be signed between the Netherlands and an African country and the seventh in the world.
Commissioner-General of the GRA Mr. George Blankson initialled for Ghana, while Mr. Hans Docter initialled for the Netherlands.
Mr. Blankson said the two countries’ efforts at fighting tax evasion through improvements in transparency and exchange of information will lead to the discovery of concealed offshore accounts and assets and improve tax cooperation.
He explained that the cooperation between the two countries on tax matters dates back many years, and that the two countries have signed and ratified a Convention for the Avoidance of Double Taxation (DTC) and the prevention of fiscal evasion since 10th March 2008.
“Through the operation of the DTC, the Netherlands Tax administration has established spontaneous information with the GRA. This has helped the GRA in tracking tax evasion and avoidance. In 2014, the Netherlands Tax Administration and the GRA signed an MOU on a broad range of cooperation in Tax matters.
“In furtherance of the MoU, a team from the GRA met their counterparts from the Netherlands Tax Administration in Amsterdam during October of 2014 to negotiate and initialled an MOU on the automatic exchange of information.”
The Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAC) and the DTC are legal instruments for the exchange of information, and has traditionally been the international standard for cooperation in tax matters. However, 2014 has seen the creation of one common global standard for automatic exchange of information.
Mr. Docter said the relationship between the Netherlands and Ghana is changing from being development-led to a trading one.
“Since our economic relationship becomes increasingly important, an efficient exchange of information is essential. At the same time it is important for the government to increase its revenue collection.
“A healthy financial situation is an important condition for the trade and investment relationship between Ghana and the Netherlands to flourish. It will all contribute to our common goal: to grow together both in trade and investment.”
He said the Netherlands is to make similar arrangements with other African countries and that it has signed MoUs on the automatic exchange of information for tax purposes with 19 countries. The first one was with France in 1996 and the last one with Italy.
He said the Netherlands attaches very high importance to avoiding and combatting fiscal fraud as well as ensuring that tax is being paid in the countries entitled. Signing this MoU will be a great step forward.
“Besides signing this MoU, Ghana and the Netherlands are currently collaborating in other areas to increase revenues and avoid and combat fiscal fraud. So the Netherlands and Ghana are reviewing the tax treaty on double taxation to include an anti-abuse clause. This will make it more difficult for multinational companies to evade taxes.”
He added: “Dutch tax inspectors work closely together their Ghanaian counterparts to train them on auditing multinational companies in order to combat tax evasion through transfer pricing. To increase Customs revenues, on the one hand, Dutch Customs officers assist Ghanaian Customs officers to reform in areas such as valuation and classification, and support trade facilitation.
“On the other hand, we provide support to the GRA through the Good Financial Governance Programme together with Germany and Switzerland.”
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Trade experts steer new course for developing Commonwealth countries
Commonwealth trade experts and senior government officials have issued a set of recommendations to advance the trade interests of least developed countries, small states and sub-Saharan Africa.
The newly-established Commonwealth Expert Group on Trade met for the first time in Malta from 25 to 26 March to consider the trade challenges faced by these countries.
Participants reviewed recent developments in global trade, including the changing dynamics of trade as a result of the rise of emerging economies; the increasing share of South-South trade; and the growing prominence of mega-trading blocs.
Presenting research on trade growth in small states in particular, Dr Mohammad Razzaque, the Commonwealth Head of International Trade Policy, noted the weakening relationship between growth of GDP and growth of trade.
Dr Razzaque said this raised serious concerns about the external competitiveness and effective participation in global trade for the 31 small states of the Commonwealth.
Participants recommended mobilising more aid for trade and exploring opportunities for value-added exportables to improve the trading position of small states. They also agreed to promote inclusive negotiations at the World Trade Organisation (WTO) to ensure capacity-constrained countries are included.
Janet Strachan, Interim Director of the Economic Policy Division, emphasised that the new forum provided an important platform to consider the trade interests of developing Commonwealth countries in the post-2015 agenda.
She said: “This Commonwealth Expert Group on Trade meeting is a timely event to identify priorities for our members, and for the global community to take cognisance of promoting the role of trade in an inclusive development process.”
Experts agreed trade could be a significant driver in achieving post-2015 goals, but for this to happen the current development framework would have to undergo reform. They called for greater assistance to help developing countries identify the links between trade and the Sustainable Development Goals to enable them to articulate their needs.
The group heard a presentation on the current status and emerging trends in the Doha Development Agenda and WTO negotiations. Participants agreed to take forward a number actions, such as advocating for adequate resources for aid for trade and identifying offensive and defensive interests in trade negotiations.
Case studies, presented by member states, detailed regional and country-specific trade experiences across the Commonwealth. One participant observed that assistance provided by the Commonwealth Secretariat had facilitated a successful trade policy review by the WTO, and had allowed a better understanding of the potential benefits of a multilateral trading system.
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Dry port links Botswana with world
Botswana’s Dry Port in Walvis Bay, Namibia, has increased accessibility for Botswana nationals linking them to the international markets, according to the acting deputy permanent secretary in the Ministry of Transport and Communications, Ms Onalenna Sechele.
Speaking at the Trans Kalahari Corridor Secretariat’s Beyond Borders Information Session (TKCS) in Gaborone on March 25, Ms Sechele said the project that was spearheaded by Botswana Railways was completed last year and now operational.
The objective of the gathering was to disseminate information on the latest developments on the Walvis Bay Corridors
She said of late, Botswana witnessed a steady increase in imports and exports through the Port of Walvis Bay, hence the need to seriously consider this port as an alternative trade route and said a large portion of consignments being transported through this corridor include vehicles and general cargo.
Ms Sechele said what is to be witnessed are tangible economic benefits for the people of SADC region and said semi urban and rural villages dotted along major transport routes will also have scope for development through service industries, market integration and most all, through decentralised employment opportunities.
She said as SADC citizens and especially leaders, they have an immense task and responsibility to translate the economic opportunities into tangible returns.
She stated that the development of corridors promotes regional economic growth with the aim of intensifying economic activities to and from markets along the various corridors and it is indeed befitting of them to regard trade and transport corridors as an emerging development solution offering immense potential for developing states.
Ms Sechele said the Walvis Bay Corridors efficiency continues to increase because of the unique Public Private partnership existing between Botswana, Namibia and South Africa, which have been instrumental to identify and resolve hurdles to trade along the corridors.
She said through this partnership the three governments continue to work on the betterment of the transport infrastructure along these corridors and as such the corridor contributes towards intra-SADC and global competitiveness, thus integrating the economies into the global economy.
Ms Sechele urged the TKCS and the Walvis Bay Corridor Group (WBCG) to continue with the good work they are doing for the benefit of the three countries international trade which would in turn develop their economies for the benefit of their people.
For his part, the manager for sales and service at the Namibian Port Authority (NAMPORT), Mr Elias Mwenyo said NAMPORT’s contribution value to Botswana market by linking the country with other SADC countries which will ultimately increase the container handling at the Botswana’s dry Port which will be destined to other countries such as Zimbabwe and Zambia to mention a few.
Meanwhile, the chief executive officer at the Botswana Railways, Mr Dominic Ntwaagae said their mandate as BR is to provide transportation of goods and passengers, safely, efficiently and cost effectively and more importantly to meet customers’ expectation.
He said through their subsidiary company registered in Namibia called the Sea Rail Botswana, its main objective is to consolidate maritime goods into inter-modal and long distance transport flows and also improve cargo processing through coordinated operations to facilitate collection and distribution of local, regional and international transport.
Mr Ntwaagae said the Botswana Dry Port is integrating Botswana and the SADC region with Walvis Bay Port and strengthens multi-modal solutions and create opportunities for new services and also reduce total transport and logistics costs as well as journey time.
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Economic Report on Africa 2015: Industrializing through trade
Executive Summary
Africa’s growth continued to increase rising from 3.7 per cent in 2013 to 3.9 per cent in 2014. The performance was underpinned by improved macroeconomic management, diversified trade and investment ties with emerging economies among other factors. Africa’s social development indicators reveal the weakness of the observed economic performance: high unemployment and poverty coexisting with robust growth. This is a paradox.
Industrialization promises to address this paradox by promoting economic diversification, inclusive growth, efficient utilisation of abundant physical, mineral and human resources and in the process eliminate poverty and hence structurally transform Africa economies.
Trade continues to play a major role in Africa’s economic growth performance and it has potential to promote trade-induced industrialization of the continent provided it is deliberately directed at industrialization. For this purpose, trade policy must be consciously designed, effectively implemented and managed with regular monitoring and evaluation. Such a policy must recognise and key into developments in the global production system especially internationalisation of production system with a view to promoting value addition through processing and manufacturing. Finally, the goal of trade-induced industrialization must also guide the conduct, negotiations and implementation of trade and investment agreements and arrangements.
Issues in industrializing through trade
Two but related challenges facing the continent are to maintain the strong economic growth and to transform it to productivity-induced sustainable, inclusive, employment-generating, poverty-reducing, and environmentally-friendly growth. The greatest deficiency of the current growth episode is its inability to promote structural transformation of the economies of the region. Rudimentary agricultural practices and provision of services dominate the structure of African economies. This overt dependence on traditional agriculture and services sectors can only support limited growth. Industrialization with its capability to generate direct and indirect employment, strong forward and backward linkages with other sectors of the economy including external sector not only promises to transform African economies but also to ensure that growth translates into sustainable development.
No doubt, Africa’s industrialization should take advantage of its abundant and diverse resources including agricultural and mineral resources. Thus, as advocated in previous editions of the Economic Report on Africa (ERA), the continent should exploit its comparative advantage in commoditybased industrialization and add-value to these resources using its abundant human capital. Finally, continuous upgrading, a hallmark of modern industry, is important for sustainability of Africa’s industrialization. In all this, industrial policy has an important role to play so that industrialization is responsive to the yearnings of the continent especially in the promotion of inclusive and transformative growth.
Trade and industrialization are basically two sides of the same coin. A bi-directional relationship: industrialization facilitates trade, and trade also facilitates industrialization. Industrializing through trade emphasizes the role and place of trade in fostering industrial development and upgrade. Basically it involves analysis of the structure of exports and the role of trade policy in the production, imports and exports.
Based on this strong association between trade and industry, this Report, Economic Report on Africa 2015 examines how trade can serve as an instrument of accelerated industrialization and structural transformation in Africa. It also examines the challenges and opportunities for Africa to industrialize through trade in the context of the rapidly changing regional and global economic environment. In specific term, it attempts to answer the following three main questions:
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When and how trade policies benefit or harm industrialization?
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What are the prospects for Africa to industrialize by tapping into global value chains?
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What are the current status of national and regional trade policies in Africa and what are their implications for the continent’s industrial aspirations?
This Report is a follow-up to the previous editions of Economic Reports on Africa especially ECA and AUC (2013), ECA and AUC (2014) and ECA and AUC (2004). These Reports did not only focus on the role of industrialization in structural transformation of Africa by critically examining and analysing commodity-based industrialization and industrial policies in Africa but they also laid the foundation for the current Report as they emphasised the role of trade in fostering industrialization, both at regional and global level, and underlined the importance for Africa of implementing strategic trade policies aimed at overcoming market and institutional failures that hinder export competitiveness. They outlined the key factors constraining Africa’s trade which include the continent’s narrow production and export base dominated by low-value products such as raw materials and primary commodities, very high trade costs, tariff and non-tariff barriers to intra-African trade and Africa’s access to international markets. This Report delves into greater depth on the relationship between trade and industry in Africa, and specifically the role of trade in supporting Africa’s industrialization.
The theme of this Report is justified on many grounds and two of them are highlighted here. First, Africa is marginalised in the world trade. The continent’s share in the global exports increased marginally from 4.99% in 1970 to 5.99% in 1980 and has continued the downward trend since then. It was 3.3% in 2010 and 3.3% in 2013. The share of African manufactures in total merchandise exports was 18.5% in 2013.
ERA 2015 delves into greater depth on the relationship between trade and industry in Africa, and specifically the role of trade in supporting Africa’s industrialization
Based on Africa’s abundant physical, natural and human resources, the continent has potentials to significantly increase its share in the global exports. Second and closely related to the first, empirical evidence shows that the newly industrialised countries (NICs) were able to catch-up with the developed countries through highly selective trade policies. This is evident in the fact that East Asia share in the global exports increased from 2.25% in 1970 to 17.8% in 2010 coupled with the fact that manufactures constituted between two-thirds and four-fifths of the region’s total merchandise exports. Africa may not be able to replicate the feat performed by East Asia by towing the same or similar route due to the dynamics in the global trade and industrial production. However, it is also important to note that Africa is capable of surpassing the East Asian miracle by carefully designing trade and industrial path that takes into consideration lessons from experience as well as the current and future developments in the global environment.
Hence, for effective trade-induced industrialization in Africa, structural transformation of industrial production and trade is a basic pre-requisite. Three critical issues are: (1) production and trade in intermediates; (2) establishing, joining and upgrading along national/regional/global value chains; and (3) increasing role of services in (1) and (2) and in trade in general. Africa must imbibe the change from trade in products to trade in tasks and activities and promote the increasing role of services in the process.
Global value chains are an important feature in today’s global economy and African countries seeking to develop exports and grow their economies need to take them into account
Finally, and perhaps more important, trade policy is critical for effective trade-induced industrialization. National trade policy architecture and the flurry of activities in bilateral, regional and multilateral trade negotiations across the length and breadth of the continent must consistently give priority to industrialization.
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Good governance keeps renaissance on track
Free, fair and well-managed elections will increase confidence in Africa’s political class, its politics, people and economies, says Tony Elumelu.
I am optimistic about Africa and its future. I strongly believe a new Africa has begun to emerge, although one cannot dismiss the odd hurdle and challenge along the way.
What’s come to life is a more mature continent aware of its past, proud of its heritage and willing to do even more in pursuit of a brighter future.
You may wonder about such unabashed optimism from someone living and working in a country long perceived as difficult and complex.
The simple reason is that today’s Nigeria is a different country.
The potential we have long imagined for our nation is now becoming a reality.
The economic management of Nigeria has improved over the last decade and our leaders are asking more of themselves and their colleagues in and out of government.
Also the private sector is more self-assured and confident about the new economic policies that have led to steady growth in the past decade. We don’t expect anything fundamental to change irrespective of the outcome of the elections.
For this reason we have demonstrated a greater willingness to partner with the government so as to help underpin Nigeria’s growth and its prosperity.
As a business leader my hope for the election was a free, fair and well-managed poll that will increase confidence in the political class, respond to the people and prioritise the development of our economy.
Yesterday, Nigerians went to the polls, and over the course of this year, a total of 11 African countries will conduct their general elections.
Free, fair and well-managed elections will increase confidence in Africa’s political class, its politics, people and economies.
This will aid the flow of long-term investment, expand opportunities and allow broader economic participation for all Africans, especially our youth and women.
As more Africans embrace political freedom and demand responsive leadership, we should remember the critical link between civic responsibility, good governance and economic opportunity.
Good governance and political stability are essential.
However, the private sector has a duty to partner with responsible governments to shape the future of our continent.
While politicians battle it out for the votes, it is incumbent on the African private sector not to remain silent. We are a critical part of the equation.
Despite the obstacles, we see a continent rich in natural resources, the advantageous demographics of a young population, technical innovation and policies that give incentives for us to invest.
Call it enlightened self-interest, but this new dynamic is fast taking-root. Better governance and a decent level of political stability have resulted in the net flow of long-term investments, expanded opportunities and broader economic participation for all Africans, especially our youth and women.
We could do more, but at least we have started. For my part, I will continue to advocate for Africapitalism because I believe its tenets are fundamental to Africa’s future.
These tenets dictate that, through long-term investment and wealth creation, the African private sector can fulfill many of the social obligations governments often mismanage and find overwhelming.
At a policy level, business can and must encourage governments to focus on a narrower set of objectives to which they must commit.
By addressing the most pressing problems in a more focused manner it will lead to better results.
These are simple business principles, that when applied to the behemoth that is government, could achieve better results.
Primarily, I believe that a proper role of government is to support economic expansion, however, in the end the driving of the economy must be led by the private sector.
This is best achieved when governments enact growth-enabling policies in critical sectors like housing, agriculture, power, infrastructure, manufacturing and finance.
At general election times, it is also important to remember that policy continuity is critical to building confidence, retaining and attracting investment.
However, we must be realistic. We recognise that we cannot demand slimmed down and efficient governments if the private sector is reluctant to step up and take more responsibility. I cite a couple of examples of the sort of responsibility to which I refer to:
In 2013, US President Barack Obama asked African governments and citizens to support Power Africa, an American government initiative to add 30 000MW of electricity generation capacity across sub-Saharan Africa. The African private sector did indeed respond.
My investment company Heirs Holdings committed an amount of $2.5 billion (about R30bn) in investments in the African power sector, representing the largest single commitment to the initiative.
That investment will earn a positive return, however, in addition we aim to solve a series of critical problems including job creation, economic growth, and improving livelihoods. The second example is also focused on the very important power sector.
That Nigeria has a severe power shortage is no longer news.
In recognising the need for change, the Nigerian government commenced a much-heralded and transparent privatization process.
Transcorp Ughelli Power – a subsidiary of my investment company, Heirs Holdings, purchased the biggest thermal plant in Nigeria.
And we are already demonstrating how private sector management can be more efficient.
The company has expanded generation output from 115MW to 610MW a day after only 16 months of private ownership.
However, we first needed the government to unlock the opportunities for fresh investments in the sector. In the end business has become part of the solution.
That’s good for business – and good for the people of Nigeria.
This formula can be replicated in different economic sectors across the continent.
These are just two examples of the myriad ways the public and private sectors can and are working together to maximise the scope for a brighter and more prosperous Africa. But we need to do more, especially in the area of entrepreneurship, if we really want to unlock the potential of our people especially the young ones.
The $100m Tony Elumelu Entrepreneurship Programme (TEEP) seeks to play an important role in this critical area.
Launched on January 1 this year, the programme received more than 20 000 applications from all states in Nigeria and 52 countries and territories across the African continent.
The aim of the programme – which will support a new class of entrepreneurs with the $100m funding from my foundation over its 10 year life – is to discover, nurture, and support 10 000 African entrepreneurs over the next decade, with a target of creating 1 million new jobs and $10bn in additional revenues in the process.
The overwhelming response to this programme demonstrates a hunger in Africa for access to investment, training and open and competitive markets – all of which can only be made possible with supportive government policies.
It is also evidence of a thriving entrepreneurial class more than able to compete across boundaries.
We hope the programme will touch not only the lives of the 10 000 entrepreneurs who will receive the training, mentoring, networking, and funding, but also the hundreds of thousands of others who will benefit when other well-endowed Africans as well as international development partners channel funds in a similar direction.
It will have an even greater effect on Africa’s economic transformation because the voices of 20 000 African entrepreneurs have now been heard, and can be used to guide governments on the sectors which appear to be of most interest and where public funds to support new business expansion could be directed or where regional investments in clusters could have the most effect.
Of course, none of these opportunities can be realised without good governance, political stability, and governments that work to support the private sector in innovative and practical ways.
The creation of jobs, social wealth and a higher quality of life for all Africans depends on confidence in our public institutions.
With the elections over in Nigeria, we hope to see a renewed pursuit of strong and inclusive economic growth led by Nigeria’s own entrepreneurs.
The African private sector has a unique ability to drive economic growth and social wealth by pursuing long-term investments in key sectors. However, for Africa to succeed – and I cannot emphasise this enough – the private sector needs good and stable governments that are accountable and supportive across the continent.
Tony Elumelu is the chairman of Heirs Holdings in Nigeria.
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Strengthening the Asia-Africa Partnership
An event next month is an ideal opportunity to institutionalize a partnership that offers considerable opportunity.
Next month, Indonesia will be hosting the commemoration of the 60th anniversary of the 1955 Asia-Africa Conference. According to Indonesian President Joko Widodo, the commemoration aspires to remind the world that Indonesia played a significant role in the anti-colonial struggle. Amidst complex contemporary global politics, it will be a challenge for Jokowi to convince the world that this Asia-Africa gathering is necessary and relevant. Institutionalizing effective cooperation between the two continents should be a priority.
Ten years ago, Indonesia hosted the Asia-Africa Conference golden jubilee, out of which came the New Asian-African Strategic Partnership (NAASP). At that 2005 summit, Asian and African leaders agreed to revive the 1955 Bandung Spirit, whose one aim was to advance cooperation between the two continents. The NAASP expanded the form of Asia-Africa engagement from merely non-aligned and anti-colonial rhetoric to broader cooperation. Since then, there have been several projects and programs under the NAASP banner, from diplomatic training and technical cooperation to a business forum. Nevertheless, the NAASP receives little in the way of either public attention or political will. Does the NAASP really boost Asia-Africa relations? That is unclear. Certainly, interactions between Asia and Africa are growing, especially on economic matters, but they do not appear to be driven by the NAASP.
Asia and Africa currently lack any formal institutional links, despite the long-standing rhetoric of Asia-Africa solidarity. This is in contrast to Asia’s relations with other continents, which have been developed in institutions such as the Asia-Europe Meeting (ASEM) and the Forum for East Asia-Latin America Cooperation (FEALAC).
Framework
NAASP did in fact try to institutionalize interregional ties. The 2005 NAASP agreed to hold heads of state/government summits every four years and a foreign ministerial meeting every two years, but neither actually went ahead. There were some meetings under the Asian-African Sub-Regional Organization Conference (AASROC) framework, but the long-term vision of this forum remains unclear.
Leaders in Asia and Africa have ignored the NAASP’s commitment to establishing closer contact. Individual Asian powers that see Africa as an enormous economic opportunity, approach African within their own national frameworks. Each Asian country pursues its national interests through bilateral engagement, such as the Forum on China-Africa Cooperation, India-Africa Forum Summit, and Tokyo International Conference on African Development (TICAD). Yet there are few initiatives for African countries to pursue what they might want from cooperation with Asia. On several occasions, South Africa has proposed the inclusion of NAASP into the agenda of the African Union (AU) and the New Partnership for Africa’s Development (NEPAD), without success.
If the upcoming Asia-Africa gathering wants to be remembered, it should offer something fresh and substantive. Fail to do so, and the fate of NAASP will follow that of the Non-Aligned Movement (NAM): a lot of rhetoric, but little that is operational or significant. The institutionalization of the NAASP should enable Asian and African officials to meet on a more regular basis. A routine inter-continental meeting could become a venue to exchange views and address global challenges, such as climate change, development and terrorism, areas that are usually outside the scope of the more economically focused bilateral format. This would in turn add to the weight of Asia and Africa, which already account for 75.3 percent of the world’s population and 28.5 percent of its GDP, on the global stage.
Institutionalizing the NAASP as a driver of Asia-Africa relations will not be easy, but it is feasible, especially if it is modeled after ASEM and FEALAC, which have a strong tradition of informality. ASEM holds a summit every two years with periodic ministerial meetings on foreign affairs, economic, cultural and other areas. FEALAC, on the other hand, has only biennial foreign ministers’ meetings and gatherings of senior official. Neither ASEM nor FEALAC has a structured agenda or any secretariat – FEALAC has a cyber secretariat, but it is more an online database and a source of information on FEALAC activities. Neither ASEM nor FEALAC aspire to become arenas for problem solving. Rather, they are forums for building trust and dialogue, with the potential to open up mutually beneficial opportunities for their members.
Taking ASEM and FEALAC as models, the countries of Asia and Africa could start to seriously explore an informal institutionalization project. Informality will provide flexibility and inclusiveness, enabling all members to contribute. Regular meetings between foreign ministers should be initiated in the upcoming commemoration, with an eventual target of setting up an intergovernmental forum – let’s call it “the Asia – Africa Contact (AAC).”
ASEAN and Trade as Drivers
If continent-wide interregional cooperation between Asia and Africa is too complex, then they could begin with ASEAN. The Southeast Asian bloc could have some relevance from the Asian side because it is the only coherent regional community within Asia. ASEAN has the profile to set a “Pan-Asian agenda” for engaging Africa. The 2015 ASEAN Economic Community, which aims to create a Southeast Asian-wide single market and production base, is potentially compatible with Africa’s ambition of establishing a trade union comprising three regional organizations: the Common Market for Eastern and Southern Africa (COMESA), the South African Development Community (SADC), and the East African Community (EAC) by 2016. ASEAN, or even broader East Asia, could engage Africa nations through this huge trade union, which covers 27 African countries.
A closer economic engagement between ASEAN with one, if not those three regional entities in Africa will not only help to solidify relations between the continents, it also has the potential to boost trade. Currently, trade volumes between ASEAN and COMESA, for instance, are still just 0.37 percent of ASEAN’s total trade with the rest of the world. Given a burgeoning middle class and demographic conditions in both regions, there is a huge potential market, are considerable unexplored economic potential.
A free trade agreement (FTA) between ASEAN and SADC could be one aim. SADC countries offer agricultural products such as fruit, vegetables, meat and livestock. ASEAN’s main goods are electrical products, machinery and automobiles, all important imports for SADC. These competitive advantages suggest an ASEAN-SADC FTA could be quite beneficial. For one thing, African consumers would certainly appreciate the removal of the relatively high tariffs SADC and COMESA apply to imports from outside their blocs.
An FTA between Asia and Africa would be challenging to achieve, but in the meantime countries from both continents should aim to improve people-to-people and business-to-business connections, who would be stakeholders in any future FTA. In this sense, the Asia-Africa Business Summit that will be convened on the sidelines of the upcoming commemoration is welcome, and should become routine. This kind of forum can improve trust in the business community.
More The Ceremony
To create a framework that covers wide-ranging engagement between Asia and Africa, Jokowi could take a lesson from Singapore’s former Prime Minister Goh Chok Tong, who in the 1990s persistently pursued his vision of establishing ASEM and FEALAC, proactively exchanging ideas with other heads of state and government. And similar effort with Africa will obviously take time, diplomatic energy (and of course money), and will require careful study. But proposing an institutionalization project could certainly provide the bridge the two regions need.
Next month’s event should not just be ceremonial. It should have a robust, operational vision. A successful commemoration is one that can reenergize a commitment to creating a platform that eliminates gaps in culture and mindsets. For an Asia-Africa partnership to be relevant, the event next month should chart a course for more tangible, institutionalized cooperation, with economic engagement as the priority.
Awidya Santikajaya is a PhD candidate at the Asia-Pacific College of Diplomacy, Australian National University. Adib Zaidani Abdurrohman has completed a Master of Diplomacy and Trade at Monash University.
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Trading for Peace Initiative
COMESA has prioritized the development of programmes on post conflict reconstruction and development especially in the Great Lakes Region through Trading for Peace Programme.
Under this initiative 10 Trade Information Desks have been established at various border posts of the Great Lakes Region to provide small scale cross border traders with information such as pricing, taxes and markets.
Secretary General Sindiso Ngwenya told the 14th Ministers of Foreign Affairs meeting in Addis Ababa, Saturday that investing in empowering communities at the border area and encouraging interaction between them, was an incentive to avoid getting into activities that can disrupt the benefits accrued from the trading relations.
He reported that another phase of the programme had begun this year aimed at reinforcing infrastructure at these border posts starting with the reconstruction of border offices at Goma and Kavimvira in the Democratic Republic of Congo.
“During this phase, we plan to construct markets at Goma, Rubavu, Gatumba and Kavimvira, at the cost of approximately three Million dollars,” Mr Ngwenya informed the Ministers. The project is supported by the KfW Bank under the framework of the African Peace and Security Architecture.
What was most urgent, he said was to manage and resolve existing conflicts, and ensure that the factors that led people to pick up arms are addressed comprehensively so that any conflicts that are resolved remain resolved.
In addition to the post conflict reconstruction programmes, COMESA was also investing in an early warning system that is able to provide indications about structural factors that need to be addressed long before they manifest. The Secretary General however noted that it was “up to policy makers to act on the warnings given, if the conflict is going to be prevented.”
Ethiopian State Minister for Foreign Affairs H.E. Ambassador Berhane Gebre-Christos called on COMESA Member States to complement the efforts of other sub regional groupings in the region such as IGAD and continental Union involved in peace and security to avoid duplication of efforts and institutional rivalry.
In his opening address of the meeting, Ambassador Gebre-Christos said it was not only critical to build peace where it has been established but also to overcome through dialogue the persistent stalemate characterizing some conflict situations in the region.
The Minister cited terrorism as one of the serious threat facing COMESA region that required collective action to counter it.
“Terrorism threat posed by groups such as Al Shabab, AQIM, LRA and others is not only a problem of few countries but of each and every one of us,” the Minister said. “Our counter-terrorism efforts should begin from a clear understanding of this fundamental reality and demonstrate a firm commitment to individually and collectively fight the menace.”
He urged the COMESA states to support the peace efforts in Somalia and continue to assist, encourage and even press parties in South Sudan when necessary in order to achieve durable peace and stability. Mr Ngwenya thanked the European Union for funding the Maritime Security programme, and development of COMESA mediation support and early warning programmes through the African Union. He also thanked the KfW bank, the African Development Bank and USAID for supporting the Trading for Peace Programme.
The Ministers drawn from the 19 Member States appreciated the African Union for providing COMESA with conference facilities for its policy organs meetings and Summit.
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11th Meeting of the CAADP Partnership Platform calls for delivery of the AU Malabo commitments on agriculture
Walking the talk: 11th Meeting of the CAADP Partnership Platform calls for delivery of the AU Malabo commitments on agriculture towards women empowerment and development
The 11th Meeting of the Comprehensive Africa Agriculture Development Programme (CAADP) Partnership Platform (PP) officially opened on 25 March 2015 with a call to CAADP stakeholders to deliver on the commitments made in the AU Malabo Declaration on Accelerated Africa Agricultural Growth and Transformation at the 23rd African Union (AU) Ordinary Session of the Assembly of Heads of State and Government, in Equatorial Guinea last year.
The two-day CAADP PP, held under the theme, “Walking the Talk: Delivering on the Malabo Commitments on Agriculture for Women Empowerment and Development,” brings together African and global leaders from a number of international organisations, African Governments including parliamentarians from select countries, private agribusiness firms, farmers, NGOs and civil society organizations.
This PP – the first after the Malabo Declaration – is designed to help shape how the renewed commitments will be translated into action, results and impact at country level. This year's PP also comes on the backdrop of the AU Year of Women Empowerment and Development, and the adoption of the AU Agenda 2063.
Speaking during the opening session, African Union Commission (AUC) Commissioner for Rural Economy and Agriculture, H.E Tumusiime Rhoda Peace, reiterated the call made by AU Leaders during their Malabo Summit, stating that, “It is now time to deliver! It is now time to walk the talk.”
She informed the gathering that the Malabo Declaration on Accelerated Africa Agricultural Growth and Transformation, in line with Africa’s Agenda 2063, reiterates a call for action and delivery of results and impact and an expedient process of translating the commitments into results.
Commissioner Tumusiime further noted that through collaborative efforts the AUC, NEPAD Agency, Regional Economic Communities and Development Partners developed the Implementation Strategy and Roadmap (IS&R) and a programme of work for the implementation of the Malabo Declaration.
South Africa’s Director General in the Ministry of Agriculture, Fisheries and Forestry Prof. Edith Vries observed that, “70% of food is produced by small-holder farmers, a majority of them being women. Prioritizing women in agriculture would therefore be a smart and critical political move for governments.”
And giving a keynote presentation during the opening session, Dr. Ibrahim Assane Mayaki, CEO of the NEPAD Agency said, “The Malabo Declaration is situated at the highest level of ambition by placing agricultural development in the broader context of the structural transformation of our societies. This is expressed, for instance, in the goals of eradicating hunger and halving poverty. It also goes beyond the strict challenges of agricultural production to tackle changes required in African trade and institutions.”
Dr. Mayaki said the strategy to implement the Malabo commitments could no longer simply be aimed at committing to more planning and investment but would come from an increased and bold focus on reforms in economic policies and in institutional capabilities.
Other speakers at the opening event included Dr. Theo de Jager; President, Pan African Farmers’ Organisation (PAFO) and the Southern African Confederation of Agricultural Unions (SACAU) who called for more focused attention to be given to agriculture and farmers.
Mr. Roberto Ridolfi representing EU, which is the current Chair of the CAADP Development Partners Task team Chair, reiterated the partners commitment to support for delivering on the Malabo Commitments to transform Africa’s agriculture and called for enhanced adherence to principles of mutual accountability. Also in attendance was Malawi’s Minister of Agriculture, Irrigation and Water Development, Hon. Allan Chiyembekeza.
The two day meeting encompassed focused discussions and consensus on specific actions to deliver on the 2014 Malabo commitments for the next decade of CAADP in line with the thrust of the AU Agenda 2063, an important part of which is agricultural transformation and women empowerment.
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Progress in the implementation of the Pan African Cotton Road Map
UNCTAD participated in a series of meetings held in Cotonou, Benin from 9 to 11 March 2015, to mark the 10th anniversary of the European Union-Africa Partnership on Cotton and discuss implementation of the Pan African Cotton Road Map.
The EU-Africa Partnership on Cotton was established in July 2004 at a time when the price of cotton had been following a historic downward trend since 2000. As a long term objective, the Partnership aims to contribute to fighting poverty in African cotton-producing areas by increasing the competitiveness, added value and sustainability of African cotton sectors and consequently optimise their impact on producers’ incomes.
The meetings were organized by COS Coton, the Steering and Monitoring Committee of the Partnership, of which UNCTAD is an observer. The meetings were attended by representatives of the “Cotton 4” countries of Benin, Burkina Faso, Chad, and Mali; the African Union; regional economic organisations; as well as stakeholders from the cotton value chain.
Held under the theme “African Cotton at a Crossroads”, it included the third Steering Committee meeting of the Support Programme for the consolidation of the Action Framework under the EU-Africa Partnership on Cotton; Technical workshops; and the 20th COS-cotton meeting.
Two half-day sessions were devoted to the Pan African Cotton Road Map, focusing on identifying the way forward for its full implementation.
UNCTAD played a lead role in the production of the Pan African Cotton Road Map, which was the result of a comprehensive multi-stakeholder consultation process.
The Road Map makes a thorough diagnostic of the challenges facing the African cotton sector and lays out a continental strategy along three thematic areas:
- Raising productivity
- Improving marketing and trade
- Increasing value-addition
It also aims to strengthen coordination mechanisms and coherence across all policies and actions at the national and regional level, in particular between regional cotton-textile-clothing strategies.
Speaking on behalf of the President of Benin, H.E. Mr. Nassirou Bako-Arifari, Minister of Foreign Affairs, African Integration and of Beninese abroad, emphasized the need for a fast resolution of the cotton issue in WTO negotiations.
He also highlighted emerging challenges facing the sector, including the need for environmental sustainability.
In his intervention, Samuel Gayi, Head of the Special Unit on Commodities at UNCTAD, paid tribute to Ambassador Séraphin Lissassi, Permanent Representative of Benin in Geneva for the key role he played in the lead up to the June 2011 Cotonou meeting where the Road Map was first outlined. He said:
“The 2011 Cotonou meeting convened by UNCTAD, the Government of Benin and the EU through COS Coton was a historical moment. For the first time in Africa, cotton stakeholders from the East, the West, and the South spent a few days together to establish a common understanding of the priorities for the development of the African cotton sector.”
The meeting concluded with a timeline for an updated version of the Road Map, highlighting its full alignment with new policy developments at the Pan African level as well as incorporating new emerging challenges and opportunities for the African cotton sector.
It is foreseen that the technical validation of the PACRM’s implementation plan will lead to concrete actions being funded by supporters of the African cotton sector, chief among them is the EU-Africa Cotton Partnership.
Rajeev Arora, Executive Director of the African Cotton and Textile Industries Federation (ACTIF), the leading voice of the Cotton Value Chain in Africa, and a key contributor to the private sector’s perspectives in the design of the Road Map expressed his wish for the process to remain inclusive. He also said:
“We hope the implementation plan of the Pan African Cotton Road Map will be finalized on time for ORIGIN Africa later this year.”
The “Origin Africa” campaign is intended to help Africa make its position as a sourcing destination on the world’s cotton map. Its next edition will held in Addis Ababa, Ethiopia, on 21-23 October 2015.
In African cotton producing countries such as Benin, historically, cotton represents up to 30 percent of total export value.
In light of this, Samuel Gayi said that UNCTAD will pursue its support to the sector, both through its technical cooperation pillar as well as through its Research and Analysis work.
In this regard, cotton issues will be discussed at UNCTAD’s Global Commodities Forum in Geneva on 13-14 April 2015 and will also feature in the forthcoming Commodities and Development Report: Smallholder Farmers and Sustainable Commodity Development.
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African governments likely to fund Agenda 2063
Governments in the continent are likely to set aside extra money from their budgets to finance the African Agenda 2063 that was adopted by the Heads of state in January.
Experts in finance, planning and economic development meeting in Addis Ababa, Ethiopia, ahead of Finance ministers forum scheduled for March 30 and 31, propose that effective funding of the Agenda 2063 is to be addressed through mobilisation of domestic resources from the African countries.
The experts agreed that moving from poverty reduction to growth paradigm is key to realising Agenda 2063, the framework for Africa’s development.
According to Anthony Maruping, the commissioner for economic affairs in the African Union Commission, the continent needs to tap into its own wealth to finance its development agendas, most notably the AU Agenda 2063.
He said that based on experience, significant efforts have been made to map the untapped alternative sources of financing from within Africa.
“These show that significant resources could be raised from within Africa, enough to cover about 70 per cent of the development financing needs,” said Mr Maruping.
Agenda 2063 was adopted by the Assembly of the African Union in January this year as the continent’s new long-term vision for the next 50 years.
Discussions on its implementation comes at a time when the world is preparing for the third international conference on financing for development to be hosted in Addis Ababa in July to discuss the funding of the post-2015 development agenda and its Sustainable Development Goals (SDGs).
Agenda 2063 envisions a six-fold increase in per capita income by 2050, a ten-fold reduction in the number of poor people with two thirds of Africans part of the middle class and a share of global GDP tripling to nine per cent.
Abdalla Hamdok, the deputy executive secretary, UN Economic Commission for Africa, said that in order to find viable means to implement the action plans of Agenda 2063 at country or regional level, it is crucial to look at the reasons for which past continental initiatives had limited success.
“While there is potential of financing, the real challenge lies in developing an institutional fabric and strong and trustworthy mechanisms that would allow the entities in charge to implement Agenda 2063 and its Action Plans, tapping into available funds and receive a return on their investment,” said Mr Hamdok.
A range of issues related directly to financing (accessibility, feasibility, costs), he said, need to be addressed. However, there is a need to take a step back and refocus the discussion around financing from a ‘demand-driven’ to a ‘supply-driven’ debate around the questions of incentives, political buy-in and ownership to be able to turn ’potential’ sources into ’accessible’ sources, he added.
Although funding of the Agenda 2063 is to be addressed through mobilisation of domestic resources, Mr Hamdok said international finances would still be required.
“International trade will have to be appropriately reformed, modalities to keep Africa’s debt at sustainable levels should be found and applied, promotion of technology development, transfer and diffusion and innovation as well as capacity building will need to be intensified,” noted Mr Hamdok.
“Africa too needs adequate, accurate and timely statistics in order to plan, monitor and evaluate its structural transformation programmes.”
Country profiles
The final outcome on the modalities of financing will be presented to the African Finance ministers for adoption.
During the week-long conference, the Economic Commission for Africa will launch its first set of five country profiles at a side event to be held during the July 25to 31 Conference of Ministers entitled, “ECA Country Profiles as Policy Making Tools for Structural transformation”. The country profiles are in line with its commitment to providing enhanced services to ECA member States.
Once operational, the profiles will provide countries and regional entities with data and forecasting tools to refocus their energies on macroeconomic and social policies towards achieving structural transformation.
They will also provide decision makers with strategic and practical recommendations, and allow African countries to assess their macroeconomic and social performances; as well as their progress in line with post-2015 development agenda objectives on a regular basis.
“The new country profiles are not meant to duplicate existing publications by other institutions, but rather to provide a unique overview of challenges and opportunities for structural transformation”, said ECA Executive Secretary, Carlos Lopes.
A key difference between the ECA country profiles and similar products is that they will be based on a sound methodology and on the joint gathering of data with credible national sources, including national statistics offices, finance ministries, central banks and other key stakeholders.
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New report helps Zambia’s government reach its poorest
A new World Bank report is providing a detailed view of Zambia’s poorest households and areas to help the government provide support to those who need it most.
Using data from 2010, the report, Mapping Subnational Poverty in Zambia, shows estimated poverty rates by administrative divisions of the country, such as districts, constituencies and wards. According to the report, some of the poorest wards are concentrated in the Western, North Western, and Luapula provinces, while the largest concentrations of the poor population are located in some of the wards in the Lusaka, Eastern, Central, and Northern provinces.
“Zambia is a large country with clear pockets of poverty in some areas, but there is also a huge dispersion of poverty between rural and urban areas and within its provinces. Based on this data, it is clear that well-targeted support using the subnational poverty estimates obtained in the report would be extremely helpful in improving the allocation of resources to the poor,” said Alejandro de la Fuente, senior World Bank economist and lead author of the report.
The report also shows that there is a need to identify the areas with the largest concentration of poor people, rather than just providing analysis on poverty rates, de la Fuente said. For example, in rankings based on the percentage of the poor population, the constituency of Kapiri Mposhi ranks 101 out of 150 constituencies. However, based on the number of poor people, Kapiri Mposhi ranks first, with a total of 175,504 people living below the poverty line.
Although the country has enjoyed recent economic growth of above 6%, this growth has not improved living conditions for the poor, especially for those who live in remote areas. Much of the country’s gainful economic activities are concentrated primarily in the highly-urbanized Copperbelt and Lusaka regions. As a result, Zambia has one of the highest concentrations of inequality in Sub-Saharan Africa, partly because of the huge income gap that exists between rural and urban areas.
In addition to focusing on continued economic growth, the government is committed to reducing poverty through various government programs, including cash transfers which provide regular cash payments to poor households. Proposed funding for the social cash transfer program nearly tripled from K72.1 billion in FY13 to K199.2 billion in FY14, as the government plans to reach as many as 500,000 households by 2016.
“It is essential to identify pockets of poverty to provide adequate services to help the resilient people of Zambia achieve prosperity. The report also provides essential information for policymakers to prioritize the use of scarce resources in areas that need them,” said Kundhavi Kadiresan, World Bank country director for Zambia.
Completed in close partnership with the Central Statistical Office of Zambia, the poverty mapping report combines three types of data: census data from the 2010 Census of Population and Housing, household survey data from the Living Conditions Monitoring Survey 2010, and additional health, education and infrastructure data.
“The poverty mapping will enable us better target programs and scarce resources to the extremely poor households,” said Emerine Kabanshi, Zambia’s Minister of Community Development, Mother and Child Health, “This is something that our Government is excited about as it is crucial if poverty is to be reduced,” she adds.
Key Messages
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Using 2010 data, the report obtained poverty estimates at the district, constituency and ward levels
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Some of the poorest wards are concentrated in the Western, North Western and Luapula provinces, while the largest concentrations of the poor population are in some of the wards in the Lusaka, Eastern, Central, and Northern provinces
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The wards with highest poverty rates are also those with lower rates of household education, higher numbers of individuals employed in the agricultural sector, farther average distances to primary and tertiary roads, and lowest concentrations of precipitation
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The identification of areas with large concentrations of poor people complements the analysis of poverty rates
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Using poverty criteria for the allocation of cash transfers beyond districts can help target more people, as poverty varies greatly between districts, constituencies and wards
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Azevêdo says lack of trade finance can be a significant trade barrier for developing countries
Director-General Roberto Azevêdo, in opening the seminar on “Trade Finance in Developing Countries” at the WTO on 26 March 2015, pointed to a recent WTO Secretariat paper that showed trade financing gaps are “the highest in the poorest countries, notably in Africa and Asia”. He said that “lack of development in the financial sector can be a significant barrier to trade”, and told participants “let’s redouble efforts to work together and resolve this problem”. This is what he said:
Good afternoon. It is a pleasure to welcome you here today and to open this seminar.
Up to 80% of global trade is supported by some form of financing or credit insurance.
Yet in many countries there is a lack of capacity in the financial sector to support trade, and also a lack of access to the international financial system. Therefore the ability of these countries to use simple instruments such as letters of credit is limited.
The impact of these limitations on a country’s trading potential can be very, very significant.
The aim of this event is therefore to improve our understanding of the challenges in obtaining trade finance at affordable rates, particularly in developing countries – and to consider some potential solutions.
Over the course of this afternoon and tomorrow morning, you will have the chance to explore and discuss this very important topic. And we will hear from a range of different voices I’m sure.
Along with WTO members and some delegations from capitals, we are also joined today by representatives from the private sector, from other international organizations, and from regulatory bodies.
So I think we have the opportunity for a very good discussion.
The Working Group on Trade, Debt and Finance has been in place for over 10 years. The same applies to the expert group of high level trade finance practitioners which reports to me and to this Working Group.
The expert group met this morning to give their insights and to help us understand the realities that they are seeing on the ground.
I think that most of the members of that group are here this afternoon, and I thank them for their commitment.
I think that this cooperative, inter-institutional approach has yielded some concrete results.
For example, we have been pleased to work with multilateral development banks to support the creation and the expansion of various trade finance facilitation programmes.
These programmes provide payment guarantees for small trade transactions for SMEs in countries where local banks find it difficult to receive confirmation from large, global bank partners.
The programmes therefore act to reduce the risk, or at least the perception of risk, of trading in those countries.
They enable thousands of small trade transactions to take place each year, almost exclusively in poorer countries – thereby supporting around 30 billion dollars of trade.
They were also a useful counter-cyclical tool during the financial crisis.
And, significantly, they do not cost taxpayers a single cent.
In recent years, these programs have spread from the European Bank for Reconstruction and Development to all multilateral development banks, to form a global network facilitating trade finance.
And I think there are other useful initiatives which have received inputs from our work here.
For example, our dialogue with the Basel Committee on Banking Supervision helped to establish fair and reasonable prudential treatment for trade finance in developing countries.
In addition, we are helping build capacity on trade finance through our e-learning programme, and through our participation in the creation of a new trade finance academy by the International Chamber of Commerce.
So I think we are engaged in a very positive way.
But of course there is still much to do.
After the financial crisis, the supply of trade finance has largely returned to normal levels in the major markets – but not everywhere and not for everyone.
The structural difficulties of poor countries in accessing trade finance have not disappeared – indeed the situation may well have declined due to the effects of the crisis.
There are indications that markets are even more selective now. Under increased regulatory scrutiny many institutions have lowered their risk-appetites and are focusing more on their established customers. Some are deliberately decreasing their number of clients in a so-called “flight to quality”.
In this environment, the lower end of the market has been struggling to obtain affordable finance, with the smaller companies in the smaller, less-developed countries affected the most.
Members asked us to provide more evidence of this phenomenon last year.
The Secretariat document, which was published in November 2014 and updated in February, provides this evidence.
The document is available in the room today, and you will see that evidence compiled there. It is from a range of sources, but it converges towards the same message.
I was particularly struck by the fact that the financing gaps are the highest in the poorest countries, notably in Africa and Asia. And I was struck by the size of those gaps.
A survey by the African Development Bank of 300 banks operating in 45 African countries found that the market for trade finance was somewhere between 330 and 350 billion dollars.
It also found that this could be markedly higher if a significant share of the financing requested by traders had not been rejected.
Based on such rejections, the estimate for the value of unmet demand for trade finance in Africa is between 110 and 120 billion dollars.
This gap represents one-third of the existing market.
The main reasons for the rejection of requests for financing were:
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the lack of creditworthiness or poor credit history,
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the insufficient limits granted by endorsing banks to local African issuing banks,
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the small size of the balance sheets of African banks, and
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insufficient US dollar liquidity.
Some of these constraints are structural, and can only be addressed in the medium to long term. The retreat of global banks from Africa, and from other poor countries, is one such issue.
The Asian Development Bank conducted a similar survey in Asia, looking at countries like Viet Nam, Cambodia, Bangladesh, Pakistan and India.
According to preliminary estimates the unmet demand there is around 800 billion dollars.
Small and medium-sized enterprises are the most credit constrained as 50% of their requests for trade finance are estimated to be rejected. This is compared to just 7% for multinational corporations.
Moreover, two-thirds of the companies surveyed reported that they did not seek alternatives for rejected transactions.
Therefore these gaps may be exacerbated by a lack of awareness and familiarity among companies – particularly smaller ones – about the many options which exist.
A large majority of firms stated that they would benefit from greater financial education.
These findings are particularly striking as Africa and developing Asia are two areas of the world in which trade has grown fastest in the past decade.
But the potential evolution of new production networks is faster than the ability of the local financial sectors to support them.
In this way the lack of development of the financial sector can be a significant barrier to trade.
It can prevent developing countries from integrating into the trading system and accessing further trade opportunities.
And it can therefore prevent them from leveraging trade as a powerful source of development.
So we need to respond to this problem.
The exchanges that we have here can form part of this response. We need to join together in order to advocate action in this area and to devise practical solutions.
Of course, there is no magic bullet. This is a complex issue. However, that should not discourage our efforts.
The trade finance facilitation programmes that I outlined earlier are one example of practical action that we can take.
Of course this only fills part of the gap – so our response needs to be more fundamental.
In July this year the UN’s major ‘Financing for Development’ conference will take place in Addis Ababa. And I think it is essential that we put trade finance on the agenda there.
In this way we can ensure that this issue is given its proper prominence in the development debate — especially at a time when the all-important UN Sustainable Development Goals are being finalised.
At the WTO we are doing everything we can to help developing countries to integrate into the global trading system.
This is reflected in our technical assistance work.
It is reflected in the outcomes of the Bali Package, which we are implementing now.
And it is reflected in the current negotiations on the work programme to conclude the Doha Round.
But the effectiveness of all this work will be lessened if proper access to trade finance is not secured.
So I wish you every success in the deliberations here. I will be following your work very closely.
Let’s redouble our efforts to work together and resolve this problem.
Thank you for your attention.
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No longer bystanders in global processes – Seychelles President Michel signs ratified WTO accession protocol
Seychelles President Michel has signed the legal instrument for the Seychelles’ accession to the World Trade Organisation, WTO. This comes a day after the accession protocol was ratified by the archipelago’s National Assembly.
The signed document which Michel presented to WTO’s Director of the Accessions Division, Chiedu Osakwe, at State House, in the Seychelles capital of Victoria on Tuesday morning, paves the way for the island nation to become a full member of the organisation in 30 days.
A proud moment for Seychelles
Hailing the final step to WTO accession as a proud moment for Seychelles, the Seychellois Head of State expressed confidence that the country can bring additional value to the organisation.
“Joining WTO ensures that we are not bystanders while global processes are shaped and directed by others,” he said. “It ensures that we can create more opportunities for our people while also defending their right to development.”
“As a Small Island Developing State – we are reliant on open access to trade in goods and services both to ensure that the basic needs of our people are met, and to ensure that we continue to create opportunities for wealth creation and prosperity.”
Michel has called on the WTO secretariat to help build the capacity of the private sector, especially among small and medium businesses in the Indian Ocean island nation of 90,000 people.
“Our future success economically depends on our ability to innovate – to build on our strengths and reduce our weaknesses,” he said. “Our call to develop our Blue Economy is one such initiative which aims to transform our situation from price takers in the global economy to shapers of new models of development. And to develop the Blue Economy we will need to leverage the research and technological support from across the globe. WTO is well placed to facilitate this access to the key drivers of our Blue Economy transformation.”
Michel also highlighted the necessity to continue to link trade and development stressing that this will ensure that long-term investments are secure as long as there is more transparency in international trading rules.
“I am convinced that WTO accession opens up a new chapter for Seychelles’ development. A new chapter whereby even though we know we are still vulnerable to external shocks – we have many more tools with which to cope with these shocks. That we have many more tools to build other opportunities that ensure that our economies are fundamentally sustainable,” he concluded in his remarks.
WTO membership is a commitment to reform
30 days from now, Seychelles will officially become the 161st member of the WTO.
The accession process, which started almost 20 years ago, came to a conclusion in December last year, when WTO’s General Council meeting in Geneva, Switzerland approved the archipelago’s accession package, including the accession protocol.
The Director of the organisation’s Accessions Division, Chiedu Osakwe, has described WTO membership as a commitment to reform.
“Accession to the WTO is a commitment to trade integration to the core values of the WTO which are the values of the market economy, transparency, good governance and the rule of law. This is what you have committed yourself to,” said Osakwe, who spoke on behalf of the Director-General of the WTO, Roberto Azevedo.
“What you have done for your country, is not only what has been done for your country but what has been done for Africa and what has been done to update the rules of the multilateral trading system.”
Seychelles expected to participate fully in future WTO negotiations
Upon becoming a full member of the WTO, Seychelles will be expected to become actively engaged in future negotiations. One of the events where the island nation will be able to make its very first contribution will be during the 10th WTO Ministerial Meeting, which will take place in Nairobi Kenya from December 15 to 18 this year – the first time such a meeting will ever take place on African soil.
Interviewed by SNA in December last year, the Seychelles Chamber of Commerce and Industry (SCCI) Chairperson, Marco Francis said the WTO membership had to be embraced and utilised to the business community in Seychelles’ advantage.
He highlighted the need for the Finance, Trade and Investment Ministry [now Finance, Trade and Blue Economy] to have targeted informative sessions for people in the private sector and businessmen to educate them on what is to be expected and what’s in it for them and how to use this for their own benefits.
Currently, the WTO’s membership of 160 member states accounts for over 97 percent of the world’s total trade volume.
While the process of becoming a WTO member is unique to each applicant country it normally takes an average of about five years for most nations.
Seychelles initially requested membership to the WTO on May 31, 1995, and made very little progress up until it re-initiated the process in 2008.
One of the main challenges Seychelles faced was the limited expertise and experience within its national institutions in trade negotiations and in general and multilateral negotiations in particular.
Since 2008, the government made a significant amount of progress to identify the required legislative changes. By 2010, Seychelles had submitted offers in both Goods and Services, and also established a Working Party on July 11, 1995.
The island nation completed bilateral trade negotiations with nine WTO members that requested talks via Seychelles’ working party, namely the US, Canada, the European Union, Japan, Mauritius, Oman, South Africa, Switzerland and Thailand.
Tourism and fisheries are the main pillars of the island nation’s economy, with the main export being canned tuna destined mainly for the European market.
Seychelles also depends heavily on food imports with up to 90% of goods consumed coming by air and sea cargo.
According to the Seychelles National Bureau of Statistics, the country exported goods worth just over $230 million in the first 9 months of 2014, including fish products, sea cucumbers and medical supplies while importing nearly $800 million of goods during that same period.
According to provisional statistics compiled by the NBS the largest volume of imports to Seychelles in 2014 were from the UAE, followed by France, Spain, South Africa, United Kingdom, India, China, Mauritius and Singapore.
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UN trade report calls on governments to improve environment for e-commerce
The scope for developing countries to participate in and benefit from e-commerce is expanding, according to a new United Nations report released on 24 March 2015, with improved connectivity, new e-commerce applications, platforms and payment solutions, and the emergence of local e-commerce companies that are tailoring their services to local demands.
The 2015 edition of the Information Economy Report (IER), published by the UN Conference on Trade and Development (UNCTAD), analyses trends and international policy issues related to information and communications technology and its links with trade and development.
“As the digital economy expands and more business activities are affected, it becomes more important for governments to consider policies that can help to harness e-commerce for sustainable development,” said UNCTAD Secretary-General Mukhisa Kituyi, specifying that governments need to improve areas including information and communications technology infrastructure, the legal and regulatory environment, and develop skills in their populations.
The report includes a B2C (Business-to-Consumer) E-commerce Index, which draws on data to assess e-commerce readiness and help States to formulate their national e-commerce strategies. Through the Index, governments can identify their relative strengths and weaknesses. In Africa, for example, internet penetration levels need to rise to promote e-commerce readiness.
Making information and communications technology work for development requires more than expanding the infrastructure, the report says. In order to foster productive and inclusive use of information and communications technology, governments need to create legal, institutional and policy frameworks and generate the necessary skills in government, business and civil society and the Index measures progress in those areas.
Among developing countries, States at the top end of the Index are in East Asia, including the Republic of Korea and Singapore, with larger countries such as Brazil, China and Russia performing better than predicted, suggesting that large markets facilitate e-commerce.
Business-to-consumer e-commerce, valued at $1.2 trillion, is currently much smaller than business-to-business (B2B), which is worth $15 trillion, but is growing at a faster rate, especially in Asia and Africa, and is expected to double in size to $2.4 trillion by 2018.
To enable that, postal networks will be vital and the report measures data on home postal delivery as an indicator of countries’ readiness to engage in B2C e-commerce. In Latin America and the Caribbean and in Asia and Oceania, the extension of postal home delivery was found to be particularly important.
“Posts are seeing the mail makeup changing, with more merchandises making their way through their networks,” said Bishar A. Hussein, the Director General of the Universal Postal Union (UPU). “They must prepare for this growth by adapting their products and services, processes and infrastructure.”
The UNCTAD report also notes that growing concerns over cybercrime affect the willingness of both buyers and sellers to make transactions online, with research showing that the enactment of laws to facilitate security and trust in online transactions varies considerably globally, with significant gaps in many developing countries.
Although the United States is by far the most targeted country, accounting for almost half of known cases of cybercrime, information security is a rising concern for governments, enterprises and consumers around the world, especially given that $3.5 billion was lost in supplier revenue due to online fraud in 2012.
UNCTAD’s report calls for interoperability of legal measures between States, with 117 countries having enacted cybercrime legislation. Ensuring international compatibility of e-transaction laws remains a challenge and the report says the legal recognition of e-signatures, electronic contracts and evidence at a national level should ideally be extended to those originating in other jurisdictions.
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End of the road for non-tariff barriers as EALA enacts key legislation
Elimination of Non-Tariff Barriers Bill, 2015 sails through and now awaits assent by Heads of State
It is now official…. Non-Tariff Barriers (NTBs) shall soon be a thing of the past following the enactment of the EAC Elimination of Non-Tariff Barriers Bill, 2015 by EALA. The Bill sailed through the third reading after intense debate by legislators late on Tuesday.
Debate on the Bill commenced Monday evening but was adjourned following a motion introduced in the House by the Chair of the Council of Ministers, Hon Dr Abdullah Saadalla Abdullah to allow for further consultations. Prior to that, several Members had risen and made pertinent submissions in support of the Bill.
Hon Peter Mathuki called for an end to the encumbrances saying NTBs were responsible for slowing progress of integration. In his maiden speech shortly after swearing in, Hon Martin Ngoga said it was necessary for safeguards to be inculcated in the bill. He cited the clause (clause 14) on exchange of information related to NTBs by the national focal points as one that needs regulation in terms of specific reporting timeframe.
Hon Abdullah Mwinyi said it was time to institute effective sanctions for non-performance to stem out NTBs, which he stated often recurred.
Other Members who rose in support of the Bill were Hon Chris Opoka, Hon Valerie Nyirahabineza, Hon Straton Ndikuryayo, Hon AbuBakr Ogle and Hon Leonce Ndarubagiye. When the House resumed, the Bill sailed through the second reading prompting the House to reconstitute itself into the Bill Committee Stage to scrutinize it on a clause by clause mode. At this stage, various amendments to the Bill were introduced by Members.
The object of the Bill, which is moved by the Council of Ministers, is to provide a legal mechanism for the elimination of identified non-Tariff barriers in Partner States.
The Bill according to the Council seeks to give effect to Article 13 of the Protocol on the Establishment of the EAC Customs Union in which Partner States agreed to remove with immediate effect, all existing NTBs to the importation into their respective territories of goods originating in the Partner States. At the same time, this would have the effect of not imposing any new NTBs. The Council Bill also sought to establish a mechanism for identifying and monitoring the removal of NTBs within the Partner States.
The debate was preceded by adoption of the report of the Committee on Communication, Trade and Investment which considered the Bill last week. The Committee led by Hon Mukasa Mbidde met with the Council of Ministers and experts from the Customs and Trade Directorate at the EAC Secretariat and proposed amendments to the effect that respective Ministries of the EAC in each Partner State be mandated to be national focal points for matters related to NTBs.
The Committee further proposed an amendment to clause 12 (on failures of removal of NTBs) to provide for reference at the East African Court of Justice by any person aggrieved by a directive, decision or recommendation of the EAC Council of Ministers or the EAC Committee on Trade remedies.
EAC prepares a quarterly report on the status of the elimination of NTBs. This boosts on-going efforts by the National Monitoring Committees and the EAC Regional Forum on NTBs to redress NTBs affecting intra-EAC Trade.