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The African Social Development Index: Measuring human exclusion for structural transformation
Executive summary
Despite two decades of fast and sustained economic growth, Africa is yet to translate its economic gains into meaningful social development outcomes. Profound inequalities persist in many countries, and growth has not been sufficiently inclusive and equitable for all segments of the population. As a result, exclusion has become a challenge for Africa’s future development, and there is wide recognition that Africa’s transformation will only be successful and sustainable if it is also inclusive – ensuring that each and every individual reaps the benefits of growth and participates in the social and economic development of the country.
The African Social Development Index (ASDI) to measure exclusion in Africa is proposed in response to a special request from member States of the Economic Commission for Africa (ECA) that an African tool be developed to capture the continent’s current and specific social challenges, while helping them to develop more inclusive and equitable policies. It is built on an important premise that social development should be reflected in improved human conditions. Too often, the focus is on measuring the contextual elements of social development, such as improved service delivery or increased investments in social sectors, which are expected to have a positive impact on livelihoods. Translating these contextual factors into concrete outcomes at an individual level, however, comes with challenges. Following a life-cycle approach, the ASDI aims to measure the impact of social policies on human exclusion in six key areas: survival, health, education, employment, productive income and decent life. One of its key features is that it can provide measurements across time and can be disaggregated by gender and geographical location, thus helping to capture patterns of exclusion and inequality within and between countries.
The Index has been developed for and together with ECA member States through a highly consultative process, taking into account Africa’s current and emerging social challenges. It is a simple, intuitive policy tool that African countries can use to plan and improve the effectiveness of their social policies. As such, it is intended to enhance Africa’s capacity to develop policy options that can contribute to the building of more inclusive and equitable societies on the continent.
In this sense, the ASDI provides an effective policy tool for African countries to accelerate their progress toward inclusive development and set the agenda for social transformation on the continent. As a monitoring mechanism, the ASDI can be instrumental in increasing regional and global commitments to social and human development, through instruments such as the African Social Policy Framework and the New Partnership for Africa’s Development. It also dovetails with the priorities spelled out in the African Union Agenda 2063 and the Common African Position on the post-2015 development agenda, where the issues of inequality and exclusion have been given prominence.
» Find out more about the 2015 Conference of Ministers here.
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Import and export taxes under review
The Botswana Unified Revenue Service (BURS) has embarked on a process to amend the Customs and Excise Duty Act with a view to lower costs associated with import and export of goods.
According to BURS commissioner responsible for customs and excise, Philiso Phodiso Valashia, the process of consulting public and private sector stakeholders on the zero-draft commenced this week and is expected to be concluded on April 20, whereupon drafting instructions for a Customs Bill will be issued to the Attorney General.
Valashia explained that the restructuring of the customs and excise legislation would increase the competitiveness of local goods in the global markets, while also lowering the costs of goods to local producers and consumers.
“This will be achieved through the introduction of clearer and simple customs requirements and elimination of procedures that cause delays in the release and clearance processes,” he explained.
Valashia said the main objective of the conversion is to modernise, simplify and harmonise customs processes around the world to facilitate more efficient international trade in goods whilst reinforcing the capability to combat cross-border crime.
The Customs and Excise Duty Act, was written in 1964 to cater for cross-border movement of goods at the time. Then, the main focus of the law was on control of goods and those who ferry them across Botswana borders as opposed to being facilitative.
The commissioner said although the Act was amended over the years to keep pace with new customs and excise approaches and to soften and modernise the customs system in Botswana, the general tone of the Act, to a large extent, still reflects a strong undercurrent of rigidity reminiscent of the era in which it was written.
“As such it is not necessarily suitable to serve as a vehicle for implementing a modern system of customs service in accordance with current international trends and best practice,” he said.
Valashia also pointed out that the archaic nature of the Customs and Excise Duty Act is largely responsible for Botswana being ranked number 158 out of 189 countries by the 2014 World Bank Doing Business Report on the “trading across borders” criterion, a rating that he said has adverse effects on Botswana’s ability to attract and retain investment.
The commissioner also pointed out the tremendous increase in international trade volumes over the years has inadvertently increased opportunities for cross-border and trans-national crimes, such as smuggling of goods, human trafficking and importation of prohibited and restricted goods, including illicit trade of endangered species.
He noted that the proposed legislative amendments are aimed at strengthening the capacity of BURS to combat these and other illegal cross-border activities, as well as enhancing the ability of the revenue service to collect public revenue.
Following a Southern African Customs Union (SACU) customs legislative review process in which all the member states participated, the SACU Council of Ministers is understood to have agreed that a new customs legislative framework should be developed consisting of three separate pieces of legislation that would eventually replace the Customs and Excise Duty Act. These pieces are the Customs Control Act that establishes a customs control system for all goods imported into or exported from Botswana and that prescribes the operational aspects of the system, the Customs Duty Act, that provides for the imposition, assessment and collection of customs duties, and the Excise Duty Act that provides for the imposition, assessment and collection of excise duties.
Subsequently, in 2013 Botswana cabinet authorised implementation of the SACU council’s decision and in December 2013, BURS with the support of the World Customs Organisation – SIDA and the USAID Southern African Trade Hub, then secured the services of Patricia McCauley to develop a zero-draft of a new Customs Bill. McCauley is an international customs expert who, at some time, was engaged by the World Customs Organisation to review the Revised Kyoto Convention. The zero-draft was produced in April 2014 and work on it commenced until a layman’s draft of a Customs Bill was produced on February 13 this year.
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Food security: New report presents roadmap for US-Africa trade policies
The Chicago Council on Global Affairs during the week released recommendations on how U.S. trade policy could advance food security in Africa and position American businesses to tap a burgeoning African agriculture and food market, which is expected to reach $1 trillion by 2030.
The report, Grow Markets, Fight Hunger: A Food Security Framework for U.S.-Africa Trade Relations, presents evidence that an effort by the United States focused on bolstering regional trade and harmonizing food standards and regulations across countries would drive economic growth while improving the availability and affordability of nutritious foods throughout Africa.
Landmark trade agreements
“This year, the U.S. government is working to complete two landmark trade agreements and renew Trade Promotion Authority and the African Growth and Opportunity Act (AGOA),” said Ivo H. Daalder, president of The Chicago Council on Global Affairs.
“The United States would miss a significant opportunity if it did not leverage these efforts to position U.S. businesses to take advantage of Africa’s growing agriculture and food market, a region to which U.S. agricultural exports have increased by 200 percent in the last decade.”
The Council recommends that the U.S. government will build on the AGOA Forum by creating a U.S.-Africa Food Dialogue to advance regional economic integration; reduce technical regulations and standards barriers to agriculture and food trade; and implement trade facilitation measures.
The report also asks Congress to expand staff at the Office of the U.S. Trade Representative focused on agriculture and food issues and to empower the newly created Under Secretary of Trade at the U.S. Department of Agriculture to lead interagency activities on agriculture and food trade with Africa. The report also includes specific recommendations on how to amend AGOA to better support African agriculture and direct U.S.-Africa regional trade talks toward investment agreements.
“The U.S. government has wisely invested approximately $1 billion annually since 2008 in generating growth in Africa’s agriculture and food sector to advance global food security,” said Doug Bereuter, president emeritus of The Asia Foundation and co-chair of the Council’s project on global food security. “More Africans can gain access to a reliable and affordable source of food if we can align U.S. trade policies with its food security investments.”
Eighty percent of Africans work in the agriculture and food sector, and one quarter of the continent’s total population is chronically undernourished. In spite of this, current U.S. trade approaches to Africa have limited food security benefits and also do not benefit American farmers and agrifood businesses as much as they could. The United States focuses largely on bilateral trade in the mining and manufacturing industries, neglecting the development of harmonized standards, cohesive regulatory frameworks and the agriculture and food sector writ-large. In 2012, only 0.6 percent of Africa’s agriculture and food exports, which totaled $52 billion, went to North America.
“African and American farmers and agrifood businesses stand to make big gains if we can increase regional trade in Africa through tackling some of the inconsistencies in standards and regulatory frameworks,” said Dan Glickman, former U.S. secretary of agriculture and cochair of the Council’s project on global food security. “We need to make more headway in reducing the cost of moving agricultural products and food within and between countries.”
The Chicago Council study recommends that U.S. trade policy focus on five goals to advance food security and position U.S. businesses to benefit from Africa’s rapidly growing future food market:
This report is the latest in a series of Chicago Council studies on global food security and the role of agriculture and food in low- and middle-income countries.
Summary of Report Recommendations
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EAC leaders urge faster integration
East African Heads of State have commended achievements made under the Northern Corridor Integration Projects (NCIP) initiative and advocated for faster integration of the region to bring about prosperity.
Presidents Yoweri Museveni of Uganda, Tanzania’s Jakaya Kikwete, Uhuru Kenyatta of Kenya, Salva Kiir Mayardit of South Sudan and Burundi’s Second Vice President Gervais Rufyikiri as well as Ethiopia’s Minister for Foreign Affairs Tedros Adhanom Ghebreyesus, joined President Paul Kagame in Kigali yesterday for the 9th NCIP summit.
Less than two years since the northern corridor meetings began, fourteen projects including infrastructure, energy, transport, ICT and trade have been launched.
Recent achievements of the Northern Corridor Integration Projects include the improved free movement of people and labour, the use of Identity Cards as travel documents, the establishment of One Network Area, the one visa for tourists coming to Kenya, Uganda and Rwanda and the waiver of work permits for EAC citizens in the northern corridor.
Rwanda and Uganda also ratified peace and security pact that will soon be extended to Kenya to ensure the three countries work together to prevent and resolve conflicts.
Opening the summit, President Kagame emphasized the importance of maintaining the momentum:
“The results we have achieved together so far should motivate us to do more and faster. With political will and prompt follow-through, we can achieve the tangible results the people of our region need and deserve,” Kagame said.
President Kenyatta argued that East African nations should not be importing from elsewhere when a surplus exists within the region and added that with a common market, nations have no reason not to be manufacturing its own cars or textiles among others. “We can create a region that has a strong voice on a global scale and is an attractive place for investment,” Kenyatta added.
Speaking on behalf of Prime Minister Hailemariam Desalegn, Ethiopia’s Foreign Minister Tedros Adhanom Ghebreyesus described the NCIP as an example of integration on the African continent.
During last year’s NCIP Heads of State summit in the Kenyan capital Nairobi, heads of state renewed their commitment to fast-tracking the implementation of infrastructure projects, including the Standard Gauge Railway (SGR) for which they directed Ministers of Finance, Infrastructure and Attorneys General or Ministers of Justice to jointly mobilise financing, as well as completing agreements on power purchasing and work on building electricity transmission lines.
“The Heads of State noted with appreciation the progress in the implementation of the various projects under the Northern Corridor Initiative, and reiterated their collective resolve to continuously work together in pursuit of the set vision and goals of fast-tracking the integration process, for the benefit of the citizenry of the Northern Corridor Region,” the Presidents said in a final communiqué issued after the summit.
They also welcomed the announcement by Burundi to “end its observer status” and fully participate in the Northern Corridor Integration Projects Initiative.
“Our people benefited from the progress and my government appreciates and supports all the efforts made in the interest of the people of our region. I would like to announce to you that the period in which Burundi participated as an observer is finished. We are now fully participating,” Burundi’s Second Vice President Gervais Rufyikiri said.
The 9th Northern Corridor Integration Projects Summit also marked the first meeting involving members of the private sector. The Heads of State resolved to facilitate a stronger partnership with the private sector including through financing the Northern Corridor projects.
The next NCIP Summit will be held in Uganda within the next two months.
» Read the Joint Communiqué here or download the document below.
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African Ministers call for adaptation-mitigation parity in 2015 Climate Agreement, to keep global temperature rise below 1.5°C
Cairo Declaration shows Africa’s Resolve to: Enhance Natural Resources Management, Integrate Inclusive Green Economy into Development Planning, Develop Common Strategy on Wildlife, Redress Inequity
Ministers and delegates from 54 African nations meet in Cairo at the 15th Session of the African Ministerial Conference on the Environment (AMCEN), issued Friday, the Cairo Declaration which reaffirmed their resolve to reach a binding climate change agreement that reflects the continent’s priorities and aspirations at the Paris talks, later this year. The Declaration also spotlights the need to improve the management of Africa’s abundant natural resources and the integration of the inclusive green economy in development planning.
AMCEN President and Minister of Environment of Egypt, Dr. Khaled Fahmy said, “The Cairo Declaration covers a wide range of priorities for the continent. From climate change and natural resources management to the illegal trade in wildlife and the integration of the inclusive green economy across sectors. African countries are showing solidarity and a determination to play a positive and responsible role in support of sustainable development, building resilience and poverty eradication.”
Stressing Africa’s vulnerability to the effects of climate change, in particular the adverse effects on ecosystems, food production, and social and economic development, Ministers agreed to support an agreement in 2015 that provides parity between mitigation and adaptation ? noting the increased burden for adaptation in developing countries.
They indicated the agreement needs to ensure that the mitigation ambition keeps global temperatures well below 1.5°C from pre-industrial levels, by the end of the century.
The Cairo Declaration calls for a global goal for adaptation which takes into account adaptation needs and associated costs, including support for developing countries, while recognizing the need to up adaptation investments in developing nations.
The science shows that Africa is the continent where a rapidly changing climate is expected to deviate earlier than across any other continent from “normal” changes; making adaptation a matter of urgency.
The second edition of the Africa Adaptation Gap report indicates that extensive areas of Africa will exceed 2°C by the last two decades of this century, relative to the late 20th century mean annual temperature. This would have a severe impact on agricultural production, food security, human health and water availability.
In a 4˚C world, projections for Africa suggest sea levels could rise faster than the global average and reach 80 cm above current levels by 2100 along the Indian and Atlantic Ocean coastlines, with particularly high numbers of people at risk of flooding in the coastal cities of Mozambique, Tanzania, Cameroon, Egypt, Senegal and Morocco.
Under these scenarios, adaptation costs would reach US $50 billion annually by mid-century.
“The only insurance against climate change impacts is ambitious global mitigation action in the long-run, combined with large-scale, rapidly increasing and predictable funding for adaptation. Investment in building resilience must continue to be a top funding priority, including as an integral part of national development planning,” said Achim Steiner, UN Under-Secretary-General and Executive Director of the United Nations Environment Programme (UNEP).
“The coming months will determine how Africa’s development priorities and climate change common position are articulated and reflected in the context of global negotiations. The work undertaken here by the AMCEN will influence the future of generations to come. It is a grave responsibility that also carries myriad opportunities for the future welfare, prosperity, and development of the continent and its people,” he added.
Managing Africa’s Natural Capital and Transitioning to a Green Economy
African Ministers agreed to optimize the use of natural resources for sustainable development and poverty alleviation. They also expressed their resolve to integrate the inclusive green economy into development planning by mobilizing funds, creating jobs and specially targeting small and medium-sized enterprises.
“We need to step up regional and national efforts and to consider natural capital valuation in decision-making in order to harness the full potential of Africa’s rich endowments and to employ the competitive advantage offered as an engine for inclusive economic growth,” said AMCEN President, Khaled Fahmy.
Africa, the world’s second-largest continent, holds a huge proportion of the world’s natural resources, both renewable and non-renewable. Ecosystem services such as water, hydrologic regulation, soil fertility, biodiversity, climate change adaptation etc. underpin Africa’s economic sectors like energy, tourism and agriculture.
The new Green Economy Africa Synthesis study, conducted across 10 African countries, shows that despite real Gross Domestic Product (GDP) increases across Africa of, on average, 5.1 per cent a year over the last 10 years, social and economic challenges remain acute: 48.5 per cent of Sub-Saharan Africans live in extreme poverty, 76 per cent of households are not connected to the grid, and 70 per cent do not have access to improved sanitation.
The report makes clear that green investments can not only drive economic growth faster than business as usual investments, but represent a valuable opportunity for Africa to conserve the natural foundation wealth on which economies, lives, and livelihoods depend.
Enormous sustainable, renewable, and untapped resources exist on this continent. Africa receives 325 days per year of sunlight and is using less than 7 per cent of its hydroelectric potential, and less than 2 per cent of its geothermal capacity.
Many African countries are beginning to tap into this potential:
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Green investments in renewable energy development in Burkina Faso are expected to yield an increase in electricity generation from renewables 180 per cent greater than business as usual investments.
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In South Africa, a new Green Economy Accord is set to create 300,000 green jobs by 2020.
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In Egypt, a shift to a a green economy pathway could lead to annual savings of over US $1.3 billion in the agriculture sector, and US $1.1 billion in the water sector, as well as a 13 per cent reduction in CO2 emissions, and a 40 per cent reduction in water consumption.
“What is required, if the green economy is to effectively take off across Africa, is to scale-up investments and adopt the right mix of policy, incentives, enforcement, education capacity development and informational tools,” said Mr. Steiner.
Common Strategy on Combating the Illegal Trade in Wildlife
African Ministers also decided to adopt a common strategy on the illegal trade in wildlife, to be discussed at the International Conference on Illegal Trade, to be held in Brazzaville in April 2015.
The strategy will provide an improved understanding of the drivers of demand and supply and the development of the tools required to strengthen action to reduce demand and supply.
It also calls for the establishment of inter-regional cooperation mechanisms and an improved understanding of the role of indigenous communities in addressing and combating the illegal trade.
Once an emerging threat, wildlife and forest crime today has transformed into one of the largest transnational organized criminal activities alongside drug trafficking, arms, and trafficking of human beings. Beyond immediate environmental impacts, the illegal trade in natural resources is depriving developing economies of billions of dollars in lost revenues.
Combined estimates from the Organization for Economic Co-operation and Development (OECD), the United Nations Office on Drugs and Crime (UNODC), CITES, UNEP and INTERPOL place the mo netary value of all environmental crime – which includes logging, poaching and trafficking of a wide range of animals, illegal fisheries, illegal mining and dumping of toxic waste – at between US $70 and US$213 billion each year. This compares to global Overseas Development Assistance of around US $135 billion.
A UN-Interpol report released last year finds that wildlife and forest crime plays a serious role in threat finance to organized crime and non-state armed groups, including terrorist organizations.
Background
According to the African Development Bank:
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About 30 per cent of the world’s mineral reserves are in Africa,
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The continent has 8 per cent of the world’s natural gas reserves,
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12 per cent of its oil reserves,
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40 per cent of its gold and 80?90 per cent of its chromium and platinum
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Africa holds 65 per cent of the world’s arable land
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10 per cent of internal renewable fresh water sources
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The African fisheries sector is estimated to be worth US $24 billion
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China eyes more bilateral treaties with Africa nations
China has pledged to sustain the on-going diplomatic and development initiatives between it and African nations.
Speaking at a world news conference in Beijing on Sunday as part of activities to mark the Communist Party activities for 2015 and to review achievements recorded in 2014, the country’s Minister of Foreign Affairs, Wang Yi, said Africa remained a traditional friend of China.
“We are determined to consolidate on so many on-going projects and bilateral relations entered into in 2014, that will be beneficial to both parties.
“We have also remained friends, even during trying periods like the time of outbreak of Ebola disease, when over 1,000 Chinese medical doctors actively participated in trying to contain the situation.
“Over 750 million Yuan (about 120 million dollars) was spent. Just two days ago, the last patient left China medical centre in Sierra Leone,” he said.
He said that based on agreement with the African Union, a permanent Mission has been created at the AU office in Addis Ababa as part of efforts at forging closer relations.
The Minister also said that arrangements had been concluded for the sixth ministerial conference for China and the A, to be held before the end of the year.
He said the conference would consider pending issues and more areas of cooperation.
He said that China would be more involved in Africa in Industrial, Health and Security cooperations in 2015 as a wa of consolidating the gains in 2014.
He said that China’s diplomacy in Africa remained unchanged, with as emphasis on diplomacy of non- interference but “win-win” situation and not the “winner takes all”.
On international cooperation against corruption he said China would continue to go after corrupt people in and outside the country, as 91 anti-corruption treaties had been signed.
“We need to sign more in future; we appreciate the support of international communities in our war against corruption,” he said.
On global terrorism, the minister said that the problem had remained a global challenge, of which China had been playing an active role to contain.
“Our approach has been common sense approach; listen to all sides, remove the breeding grounds, attack the causes and respect other views.”
“This has been our approach and we have been working with others to resolve issues in troubled spots,” he added.
On Iranian nuclear issue, he said China had been part of the negotiation team, adding that a comprehensive settlement would be reached that would halt nuclear proliferation.
“No doubt there are some uncertainties but there is light ahead through political settlement.
Earlier the Minister of Commerce, Gao Hucheng, had said that China enjoyed the cooperation of African countries in bilateral trade, leading to huge investments in Africa.
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Pan-Africa project to focus on potential of fish trade for increased nutrition and income
A new pan-African project has been launched to strengthen the continent’s great potential for increased trade in fish. Africa, a continent that is endowed with plentiful fish resources in oceans, rivers, lakes, floodplains and fish farms accounts for just 4.9% of global fish trade. More efficient trade could significantly improve income and nutrition for millions of Africans, particularly those 12.3 million that are directly employed in the fisheries and aquaculture sectors.
Trade is constrained by inadequate market and trade infrastructure and poor policy implementation. High transport costs, complex and unaligned trade rules and poor market information also prevent Africa from optimizing the social and economic benefits available.
‘FishTrade for a Better Future’, a European Commission funded project implemented by WorldFish, the New Partnership for Africa’s Development (NEPAD) and the African Union Inter-African Bureau for Animal Resources (AU-IBAR) will strengthen value chains and, with a focus on sustainability, give better access to intra-regional markets and subsequently improve food and nutritional security and income in sub-Saharan Africa.
Stephen J Hall, Director General, WorldFish: “Africa has the potential to develop its fisheries and aquaculture to play a much greater role in promoting food security, providing livelihoods and supporting economic growth. Per capita consumption has fallen, despite Africa’s great abundance of aquatic resources. FishTrade will create the foundations for a more solid, productive and sustainable building-up of this great, continent-wide, resource.”
Hamady Diop, Programme Manager Fisheries and Aquaculture, NEPAD: “Recent years have seen increased growth in aquaculture. FishTrade will provide the opportunity to learn from past successes and failures and governments will be given the right information to be able to create the incentives and infrastructure that investors need to meet local demand and penetrate higher value-added export markets.”
Steve Wathome, Programme Manager, Agriculture and Rural Development Delegation of the European Union to Kenya, European Commission: “The EU is convinced that the Fish Trade programme will significantly contribute towards the fisheries sector in Africa. Trade has been identified as one of the major challenges affecting growth of the fish sector in Africa, with challenges being notable with regard to intra-Africa trade and accessing global markets.”
Prof. Ahmed El Sawalhy Director AU-IBAR: “Trade plays a major role in the fishery industry as a creator of employment, food supplier, income generator, and contributor to economic growth and development in several African countries. Domestic and intra-regional trade of fish (both marine and inland waters) is important with great potential for enhancing regional integration and food and nutrition security. However many AU Member States still face several constraints in improving their fish trade and marketing sector. This project will enable alignment of policies at the continental level and open-up fish trade that we believe will have a strong effect on the alleviation of poverty in some of our poorest regions.”
FishTrade will work in four ‘corridors’ to generate information on the structure, products and value of intra-regional fish trade and its contribution to food security in sub-Saharan Africa. Recommendations will be prepared on policies, fish certification guidelines and quality and safety standards, as well as regulations. A second stage will focus on strengthening the trade capacities of private sector associations, in particular of women fish processors, women traders and all aquaculture producers, in order for them to make better use of expanding trade opportunities through competitive small- and medium-scale enterprises.
Finally Fish Trade for a Better Future will support adoption and implementation of appropriate policies, fish certification procedures, standards and regulations by key stakeholders in intra-regional trade.
The program will equip governments with the capacities needed to implement the African Union Policy Framework and Reform Strategy for Fisheries and Aquaculture in Africa. In addition, it has been designed to support the work of governments towards implementation of the Malabo Declaration on Accelerated Agricultural Growth And Transformation for Shared Prosperity And Improved Livelihoods.
FishTrade Facts:
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Fish contains important micronutrients and omega-3 fatty acids that are particularly important in Africa where one in three children are stunted as a result of poor nutrition.
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Fish accounts for just over one fifth of sub-Saharan Africa’s protein intake but per-capita fish consumption has stagnated and is now under half the global average.
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The continent produces 9.9 million tonnes of fish a year and yet its share of global trade in this valuable commodity is just 4.9%.
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In 2011, Africa became a net importer of fish.
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Of the 9.9 million tonnes of fish produced in 2010, one third came from inland fisheries and 1.49 million tonnes came from aquaculture (fish farming).
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In 2011 the value of pan-African fish trade was US$24bn, equivalent to 1.26% gross domestic product of all African countries.
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The fisheries sector in Africa employs 12.3 million; accounting for 2% of Africa’s population between 15 and 64 years old; and of whom 27% are women.
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The cost of illegal and unregulated fishing in Africa is estimated to be over US$1bn a year.
About WorldFish
WorldFish is an international, nonprofit research organization that harnesses the potential of fisheries and aquaculture to reduce hunger and poverty. Globally, more than one billion poor people obtain most of their animal protein from fish and 800 million depend on fisheries and aquaculture for their livelihoods. WorldFish is a member of CGIAR, a global research partnership for a food-secure future.
About AU-IBAR
The African Union Interafrican Bureau for Animal Resources (AU-IBAR) is a specialized technical office of the Department of Rural Economy and Agriculture (DREA) of the African Union Commission (AUC). AU-IBAR’s mandate is to support and coordinate the utilization of livestock, fisheries and wildlife as resources for both human wellbeing and economic development in the Member States of the African Union (AU).
About NEPAD
The New Partnership for Africa’s Development (NEPAD), is the technical arm of the African Union, responsible for promoting the African Union strategic framework for pan-African socio-economic development, is both a vision and a policy framework for Africa in the twenty-first century. NEPAD is a radically new intervention, spearheaded by African leaders, to address critical challenges facing the continent: poverty, development and Africa’s marginalization internationally.
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Development of SADC Industrialisation Strategy and Roadmap underway
The SADC Ministerial Task Force on Regional Economic Integration met on 5 March 2015 in Harare, Zimbabwe, to deliberate on the Interim Report on the development of the SADC Industrialisation Strategy and Roadmap.
Comprising of the ministers responsible for Trade, Industry and Infrastructure in SADC Member States, the Task Force will submit, to the extraordinary meeting of the SADC Summit of Heads of State and Government scheduled to take place in April 2015.
The development of a SADC Industrialisation Strategy and Roadmap was mandated by the 34th Summit of SADC Heads of State and Government meeting of August 17 & 18, 2014 held in Victoria Falls, Zimbabwe following its adoption of the Summit Theme: SADC Strategy for Economic Transformation: Leveraging the Region’s Diverse Resources for Sustainable Economic and Social Development through Beneficiation and Value Addition.
The Meeting of the Ministerial Task Force on Regional Economic Integration was officially opened by Hon. Pelekezela Mphoko, Vice President of the Republic of Zimbabwe. It was also addressed by Dr. Stergomena Lawrence Tax, SADC Executive Secretary, and was chaired Hon. Michael Bimha, Minister of Industry of the Republic of Zimbabwe.
Extracts from the Statement by the Guest of Honour at the opening of the Meeting
It gives me great pleasure on behalf of the Government of Zimbabwe and indeed on my own behalf, to address this August gathering of the Ministerial Taskforce on Regional Economic Integration meeting.
Whilst I am aware that the task before you is a daunting one, I am also equally convinced the resilience you have exhibited during the long road on negotiations is equally present to manage and resolve the challenges before you.
Turning to the agenda of this meeting, and as you might be aware, this meeting is arising from the Summit Decision which mandated this Ministerial Taskforce on Regional Economic Integration to urgently meet and agree on a Strategy and Roadmap to frontload Industrialization. This is in preparation for the Extraordinary Summit to be held in April 2015.
Our leaders in their great wisdom at the August 2014 Victoria Falls Summit noted the need to produce first in order to trade, hence the decision to frontload industrialization, particularly the sequencing of targeted outputs on Industrial Development and Trade Liberalisation in order to ensure that, at the current stage of integration in SADC, industrialization is accorded centre stage.
I could not agree more with this Summit decision, as we are all aware of the importance of an Industrialization Strategy in the region, and this cannot be over emphasized given the problems faced by SADC as a region.
I also believe that the decision emanated from the theme of the Summit which was aptly named, ‘SADC Strategy for Economic Transformation: Leveraging the Region’s Diverse Resources for Sustainable, Economic and Social Development through Beneficiation and Value Addition’.
It is a fact that the SADC region is abundantly endowed with natural resources, including many minerals and agricultural resources. However these resources remain ‘dead resources’ if they are not exploited and maximum value is derived from them through value addition and beneficiation.
The region remains poor largely due to the fact that these resources are exploited and exported mainly in primary form, with little or no local value addition undertaken. Dependence on primary products has exposed many resource-rich African countries to the vagaries of global markets, and associated with increased frequency cycles of commodity booms and busts.
The challenge facing SADC is to transform the economies of the region from resource dependent ones to dynamic, diversified industrial economies not only based on the ‘catch up’ technology but critically encompassing both public and private innovation through enhanced research and development.
The natural resource richness of the SADC region does, therefore, provide a foundation for its accelerated industrialization. The Summit theme is, therefore, intended to maximize revenue derivable from the exploitation of the region’s natural resources, enhance investment required for industrial development, and increase local processing and value addition of natural resources. Furthermore there is need to increase local inputs into production and integrate the region’s enterprises into relevant global value chains.
In conclusion let me re-emphasize that you need to respond to the Summit decisions in your deliberations so that you remain focused on frontloading industrialization and properly sequencing industrial development vis-à-vis market integration as mandated by the August 2014 Victoria Falls Summit.
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What does BRICS cooperation mean for African trade and sustainable development?
Africa can engage with BRICS to achieve trade and sustainable development goals.
The rise of China and India as powerful economic powers in the world has rapidly transformed international relations in a significant way, resulting in a dramatic shift in the balance of power from the West to the East. Following closely behind have been Russia, buoyed by the ongoing commodities boom, and Brazil, reaping the rewards of pragmatic economic reform.
The BRICS (Brazil, Russia, India, China, and South Africa) have become an integral component in investment and global expansion for almost all serious Western multinationals. South Africa, the continent’s economic power house, has also deepened its economic engagement with China, India, and Brazil while expanding its own economic engagement with the rest of the continent. The emergence of these new ‘Southern powers’ to the world stage and their increasing engagement with the African continent is a clear indication that North-South relations are being superseded by South-East and even Africa-South East relations, with profound implications for Africa’s development. This evolution has placed special focus on trade and sustainable development issues of major significance for Africa, and these issues can be seen as important terrain for the practical implementation of BRICS cooperation in these two spheres.
Trade
The political and economic prominence of new emerging powers has coincided with major political and economic gains through much of sub-Saharan Africa, as markets continue to open up to foreign competition, and private capital flows pour into the continent. Spurred largely by China’s unprecedented foray into the continent, the BRICS have turned their gaze toward Africa as a significant component of future growth, due primarily to the continent’s largely untapped markets and huge natural resource wealth.
The successful experience of the BRICS and other emerging economies (Chile; China; Hong Kong, China; Malaysia; the Republic of Korea; Singapore; Taiwan, and Thailand) over the past half century has amply demonstrated that trade can be an important stimulus to growth. Africa’s trade response has been strong: trade with the BRICS has grown faster than with any other region in the world, doubling since 2007 to US$ 340 billion in 2012 and projected to reach US$ 500 billion by 2015, with China accounting for 60 percent. The BRICS are also becoming significant investors in Africa, especially in the manufacturing and service sectors. With respect to foreign direct investment (FDI), the BRICS have strengthened their presence on the continent compared with traditional partners, such as the United States and Europe. In 2010, for example, the BRICS’ share in FDI inward stock and FDI inflows to Africa reached 14 percent and 25 percent, respectively. The share of BRICS countries in the total value of African greenfield projects reached 25 percent in 2012 compared with 19 percent in 2003. Trade between the BRICS and Africa rose to as much as US$ 340 billion in 2012 – 10 times higher than the value recorded in 2002. Currently, the BRICS trade more with Africa than they do among themselves.
Africa must take into account several risks in its trade cooperation with the BRICS. First, trade-led growth of national output may have little impact on employment and development, particularly when most of the trade is in primary commodities with few linkages to the rest of the economy and when a significant portion of export earnings accrues to foreigners, which not only biases the economy in the wrong direction, but also reinforces internal and external dualities and inequalities. Second, the growth of China and other BRICS suggests that Africa may find it harder to break into exporting in non-primary commodity sectors as well. However, with wages rising in China – often steeply – new opportunities may emerge for African countries.
Note: Data on Africa generally exclude South Africa, for which data come under the BRICS.
Sustainable development
The BRICS position themselves as committed to strong, sustained, and balanced global economic growth supported by strong cooperation in economic, financial, and trade matters. They hold the view that such growth would need to support global development, enabling the world economy not only to recover, but also to evolve in a way that delivers prosperity for all. This is an economy that would overcome poverty, inequality, and underdevelopment in the developing world and in the periphery of the developed world. The BRICS have put forward specific proposals about how efforts aimed at strengthening international economic cooperation could make concrete and serious contributions toward the achievement of the Millennium Development Goals (MDGs) and sustainable development, climate change mitigation and adaptation, environmental protection, renewable energy development, and so forth. Frequently, the BRICS highlight issues of poverty, public health, youth development, gender equality, decent work, and social security as crucial indicators of the effect of global economic reforms.
Significant and visible commitments made by India, China, and South Africa to low-carbon development and by South Africa to a long-term development planning process that is green in many respects give reason for positive expectations while Europe and North America remain politically paralysed over the pursuit of green growth and renewable technologies. China has become the global lead investor in renewable energy, and India has seen the highest recent growth rate. The problem is that these countries have also become the main contributors to the recent increases in carbon emissions. So, there is no easy answer to the question of how the BRICS have affected the green transformation.
The United Nations Environment Programme is a good example of how the BRICS have played a leading role not only in sustainable development negotiations but also in providing monetary support. However, China and Brazil were the only two countries that announced the donation of concrete amounts to support the programme in promoting sustainable development at the Rio Earth Summit. The developed countries were reluctant to contribute against the backdrop of economic recession. The US$ 6 million donation from the Chinese government is expected to be distributed in three parts to the programme’s trust fund for projects and activities that help developing countries raise capacity for environmental management and sustainable development. The Brazilian government is expected to donate another US$ 6 million. China has declared that it will supply an additional US$ 31 million for a three-year project to help the least-developed countries, mainly in Africa, to address climate change.
Conclusion
The BRICS are not only becoming a larger feature on the global and African economic landscapes, but also their economic, political, and strategic position in global affairs is a manifestation of the potential for South-South cooperation. The BRICS show that development is possible even when the initial conditions appear to be unfavourable. Trade can be an important stimulus for rapid economic growth, and Africa’s response is particularly strong, reflecting the growing trade ties that these countries have forged with the BRICS in recent years.
For Africa, the increasing attention from the BRICS has generated a renewed interest from the continent’s traditional western trading partners out of fear of losing their long-held strategic and economic interests in Africa to the new rising Southern powers.
However, there exists a great deal of apprehension on the part of many Africans when it comes to the possible long-term implications of BRICS-Africa engagement for African development, and whether these new partnerships will result in the same unequal relationship that characterises the relationship between Africa and the West. There is also suspicion about why South Africa was invited to be the only African country member of the G-20, to the exclusion of other equally important countries, such as Egypt, Ethiopia, and Nigeria.
The BRICS can enhance the way African countries are financing their infrastructure. In fact, financing is usually available for projects in single countries rather than for those shared by a number of countries, such as intra-regional infrastructure. There has been a much-publicised slowdown in the defiant post-crisis advance of the BRICS economies individually, as well of their collective trade relations with Africa. For financing to be sustainable development financing, it will need to fund the strategies leading to a vision of what Africa should be in the next 10-20 years. Finance should follow, not lead.
Alexandra Arkhangelskaya is a researcher at the Centre of Southern African Studies, Institute for African Studies, and Russian Academy of Sciences. She is also a leading researcher, National Research University Higher School of Economics, Russia.
This article is published in Bridges Africa by the International Centre for Trade and Sustainable Development.
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Countdown to the 18th COMESA Summit
The biggest annual event in the COMESA calendar is set to take place this month in Ethiopia when Heads of State and Governments of the 19 Member bloc of countries hold their 18th meeting. The COMESA Summit will convene on 30th and 31st March 2015 at the Africa Union Commission Headquarters in Addis Ababa.
The Summit which is also referred to as the Authority is the supreme policy organ of the COMESA and meets once a year. It is responsible for the general policy direction and control of the performance of the executive functions of the organization. During the Addis Summit, the Prime Minister of the Federal Republic of Ethiopia H.E. Hailemariam Desalegn will take over the reins of COMESA Chairmanship from the incumbent H.E. Joseph Kabila Kabange, President of the Democratic Republic of Congo.
The theme for this year’s Summit is “Inclusive and sustainable industrialization”. This theme was chosen through consultations between the COMESA Secretariat and the incoming Chair of the Authority the Prime Minister of Ethiopia. The main thrust of the theme is to address industrialization in a holistic way. This is by focusing on all factors that influence and impact on industrialization such as infrastructure.
Preceding the Summit will be the Council of Ministers meeting. This forum is the second in the hierarchy of COMESA policy organs. Its mandate is to monitor COMESA activities, including supervision of the Secretariat. This forum also holds the mandate of recommending policy direction and development and its decisions are binding to all Member States.
The curtain raiser of the policy organs fora will be the 34th Meeting of the Administrative and Budgetary Committee which kicks off on 20 March 2015. This will be followed by the Intergovernmental Committee (IC), the COMESA Business Council (CBC) forum, the Council of Ministers, EPA Council of Ministers and the 14th Meeting of the Ministers of Foreign Affairs.
The Intergovernmental Committee will bring together Permanent or Principal Secretaries designated by each of the 19 Member States. It is responsible for the development of programmes and action plans in all fields of co-operation except in the finance and monetary sector. Owing to its heavy workload, this meeting will run for three days beginning from 22 to 24 March 2015.
The IC will review progress reports on Trade and Customs, Infrastructure (Airspace Integration; River Nile Projects; and Construction of the Border Markets), report on financing COMESA Programmes from COMESA Institutions and Co-operating Partners, Progress Report on the Implementation of the COMESA Micro Small and Medium Enterprises Strategy, Co-operation among Member States in the Manufacturing of Essential Drugs, Draft COMESA Industrial Policy, Draft COMESA Monitoring and Evaluation Policy Directive.
The COMESA Business Council which is the voice of the private sector in COMESA will host a two day open forum whose key theme is Combating Illicit Trade - Taking Action for Industrial Competitiveness. This meeting will be co-hosted with the Ethiopia National Chamber of Commerce.
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Continent to define vision for the future on climate, investment in natural capital, economic transitions and development
The high-level segment of the 15th Session of the African Ministerial Conference on the Environment (AMCEN) opened in Cairo, Wednesday, with delegations from 54 African nations in attendance as well as over 300 participants from around the continent representing policy makers, experts, civil society, businesses and major groups. Also attending the meeting are partner organizations, UN agencies and representatives from the donor community.
President of the Arab Republic of Egypt, H.E. Abdel Fattah El Sisi, received an AMCEN ministerial delegation and UN Under-Secretary-General and Executive Director of the UN Environment Programme (UNEP), Achim Steiner, hours ahead of the Opening of the Conference. Egypt presides over the 15th Session of the AMCEN for a period of two years, while UNEP acts as the Secretariat of the AMCEN.
The meeting comes at a crucial moment as the coming months will determine how Africa’s development and climate change priorities are articulated and reflected in the context of global negotiations, including the UN Climate Change Conference, COP21 and the Post-2015 Development Agenda.
This is the first time the meeting is held in Cairo – the birth place of the AMCEN – in thirty years since the inception of the Conference in 1985.
New AMCEN President, Dr. Khaled Fahmy, Minister of the Environment of Egypt, said, “Egypt is proud to host the 15th Session of the AMCEN in Cairo at this important moment in time. The continent stands to determine its development priorities in the context of global negotiations. It is crucial for us to clearly define common priorities and the means to achieve our objectives at the regional and national levels.”
New UNEP studies, launched at the event, show that climate adaptation costs for Africa could soar to reach US $50 billion annually by mid-century. The continent is looking at a combination of internal mechanisms supported by international cooperation to meet the cost and implement sound adaptation policies at the national and regional levels.
At the same time, Africa could reap billions of dollars and lower its carbon footprint through the transition to Green Economy. Case studies from 10 African countries will be presented, including Egypt, which the UN says could save over US $2.4 Billion annually, Cut CO2 emissions by 13 per cent, water consumption by 40 per cent and create 8 million new Jobs if it adopts such a transition across diverse sectors.
UN Under-Secretary-General and UNEP Executive Director Achim Steiner said, “On the its 30th Anniversary, I extend my warmest congratulations to AMCEN and to Africa’s leadership for having ably steered environmental governance across the continent for the last three decades; inspiring action, pioneering reform and charting a durable path towards sustainability and better lives and livelihoods for all.”
“But there is still work to be done. We need to create the policies and mechanisms that will integrate natural capital valuation and ecosystem approaches in all aspects of decision making across diverse sectors, if we are to harness the full potential of Africa’s rich natural endowments and to employ the competitive advantage offered as an engine for inclusive and equitable economic growth,” he added.
One of the main objectives of the 15th Session of the AMCEN meeting is to provide a platform for African ministers of the environment to deliberate on how to harness Africa’s natural capital to help the region achieve sustainable development, create jobs for the increasing number of young people and contribute to the eradication of poverty.
The meeting will also offer an opportunity to deliberate on substantive follow up actions related to the first session of the United Nations Environment Assembly (UNEA), which took place in June 2014 in Nairobi.
Deliberations will take place on priorities including: the post 2015 development agenda and the proposed sustainable development goals; the illegal trade in wildlife and timber; and a roadmap that define what is at stake for Africa in preparation for the 21st session of the Conference of the Parties to the UN Framework Convention on Climate Change (UNFCCC) which will be held in Paris, later this year, and which aim at forging an ambitious international agreement on climate change.
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21st Intergovernmental Committee of Experts Meeting: Accelerating Industrialization in Southern Africa
The United Nations Economic Commission for Africa (ECA) Sub-regional Office for Southern Africa will convene its 21st Session of the Intergovernmental Committee of Experts (ICE) meeting on Accelerating Industrialization in Southern Africa through Beneficiation and Value Addition from 12-13 March 2015 in Victoria Falls, Zimbabwe.
The ICE meeting is a United Nations statutory meeting which brings together experts from Southern Africa and the continent to discuss current and pressing issues affecting the social and political economy of the Southern Africa region. Past ICE meetings have attracted experts and a wide pool of stake-holders from member States, private sector, academia, international organizations, civil society and the United Nations. The ICE provides a forum for sharing ideas and lessons from a diverse pool of expertise and experiences through round-tables, presentations and open discussions.
The upcoming ICE will focus on industrialization, beneficiation and value addition; a current and recurring subject in the region among member States and the Regional Economic Communities. The meeting seeks to advance recommendations made by the SADC Head of State Summit in August 2014 calling for a clear road-map to accelerate industrialization in the region. In addition, the Common Market for East Southern Africa – COMESA is finalizing an Industrialization Strategy to which ECA has provided technical assistance.
An issues paper ‘Accelerating Industrialization in Southern Africa through Beneficiation and Value Addition’ will form the main document for review and discussion. Recommendations from the meeting will be presented to the Conference of Ministers; an annual gathering of ministers responsible for finance and planning on the continent from 25-31 March 2015 in Addis Ababa, Ethiopia.
The ICE will be preceded by a two-day Expert Group Meeting on ‘Agro-industry development for food and nutritional security in Southern Africa’ to discuss and review the state of the agriculture sector in Southern Africa. The meeting with take place from 9th to 10th March 2015, at the same venue.
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Kenya emerging as one of East Africa’s growth centers
With solid growth continuing in infrastructure, agri-cultural production, manufacturing and other industries, Kenya is poised to be among the fastest-growing economies in East Africa, according to the latest World Bank Group’s (WBG) economic analysis for the country.
The update, Anchoring High Growth: Can Manufacturing Contribute More?, forecasts a growth rate of 6% in 2015, and predicts that the positive trend will continue with the growth rate rising to 6.6% in 2016 and 7% in 2017
“To sustain momentum, Kenya needs to continue investing in infrastructure and jobs, improve its business climate, and boost it exports,” said Diarietou Gaye, the World Bank’s Country Director for Kenya.
According to the report, Kenya’s expansive fiscal policy allowed the country to finance infrastructure projects without putting excessive pressure on domestic financial markets while at the same time, keeping public debt within the 50% threshold.
“Kenya’s accommodative monetary policy stance has supported economic activities without triggering inflation or putting pressure on the exchange rate,” said John Randa, WBG senior economist for Kenya and lead author of the report.
This overall positive outlook is not without risks. Tourism has been hobbled because of concerns about security which has hit economic activities hard, especially in the country’s coastal region. Also, sluggish external demand for exports and declining production for export is widening the current account deficit.
As a share of gross domestic product (GDP), Kenya’s manufacturing sector has been stagnant in recent years. Low overall productivity and large productivity differences in firms across subsectors point to lack of competition.
“Kenya needs to increase the competitiveness of the manufacturing sector so that it can grow, export, and create much-needed jobs,” said Maria Paulina Mogollon, WBG private sector development specialist and a co-author of the report.
To sustain growth and increase the contribution of the manufacturing sector to growth, the report makes the following recommendations:
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Boost firm-level productivity to help the sector regain its competitiveness
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Address the risks associated with fiscal expansion, and rebuild policy buffers in the short to medium term, to address fiscal sustainability
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Adopt cross-sectoral policies, such as removing market distortions and implementing industry-wide productivity policies, to complement sector-specific approaches
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Support the manufacturing sector by helping raise firm productivity growth by facilitating the stock and flow of skills, technology, and information among firms
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Level the playing field between formal and informal firms by reducing and streamlining regulation, and ensuring their even and fair application, and
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Decrease the cost of doing business by addressing critical issues related to energy, access to finance, and cross-border trade, as well as devolution and counties’ revenue-raising business levies.
The Kenya Economic Update is prepared by the WBG in collaboration with government stakeholders, including the members of the Economic Roundtable such as the Ministry of Devolution and Planning, Ministry of Industrialization and Enterprise Development, Central Bank of Kenya, Kenya School of Monetary Studies, Kenya Vision 20130 Secretariat, Kenya Institute for Public Policy Research and Analysis, Kenya National Bureau of Statistics and the International Monetary Fund.
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SADC aiming to protect local businesses
Southern African countries have moved to protect their local businesses by amending the competition laws that are deemed to have loopholes and vulnerable to exploitation by international companies, resulting in the closure of local businesses in the process.
Among the countries who have already amended their competition law is South Africa, which amended its Competition Act in 2009 to introduce prohibitions on anti-competitive conduct, restrictive practices (such as price fixing, predatory pricing and collusive tendering) and “abuses” by “dominant” firms.
Another SADC country which has also tighten the screws on unhealthy competition is Botswana which for many years didn’t have any law in place until 2009 when an Act to provide for the establishment of the Competition Authority, its mandate, the regulation of competition in the economy, and matters incidental thereto was enacted.
Namibia’s Minister of Trade and Industry, Calle Schlettwein this week confirmed that Namibia is working to amend the Competition Act of 2003 which was signed into law by the then President, Dr Sam Nujoma on 3rd April 2003.
“We have discussed such matters at the regional body’s meetings for example in the SADC’s Financial Investment protocol there are chapters which contain aspects of competition law regarding the region.”
A SADC wide competition law has already been mooted but that’s just about how far it went.
“I think it’s a great idea but I have no idea why it hasn’t really taken off,” he said.
Schlettwein said the aim was not to scare international investors away but it’s rather to level the playing field and remove unwanted practices.
“This is to enhance competition while at the same time making sure that there are protective measure against unfair dominance. With Namibia’s amended competition law, the draft is still with the Namibia Competition Commission (NaCC) and nothing has been put in the system of Cabinet yet,” he said.
According to documents at hand the Namibia Competition Commission (NaCC), which is responsible for implementing the competition law hosted a workshop last week to discuss best practices in the area of competition law and policy, by bringing together relevant stakeholders, as well as to exchange experiences on how to deal with challenges in establishing adequate competition law and policies and their implementation.
At the workshop the Deputy Minister of Trade and Industry, Tjekero Tweya said numerous successes have been achieved by the government and most notable was the creation of strong institutions, good governance, upholding the rule of law and the protection of property rights.
“Competition regulation in Namibia is an integral part of the overall macroeconomic policies of Namibia.
It complements the development of the recently enacted industrial policy, the Foreign Investment Act and the enactment of a Small and Medium Enterprises (SME) policy, as well as the Transformation Economic and Social Framework (TESEF) that outlines local empowerment provisions in Namibia,” he said.
He added that, “The adoption of competition law furthermore, became imperative because of the country’s closeness with South Africa, whose companies have many subsidiaries in Namibia and are engaged in various anti-competitive practices.
The broad objective of the NaCC is to safeguard and promote competition in the Namibian market.”
Information at hand also shows that as at the end of October 2013, the NaCC had handled over 291 competition cases and market investigations since its coming into operation in 2009. Of the total number of cases, 234 were mergers and acquisitions; 54 involved restrictive business practices, including exemptions; and three were market investigations.
The Inter-Governmental Group of Experts on Competition Law and Policy (IGE) of United Nations Conference on Trade and Development (UNCTAD), which considered and adopted the report on the Voluntary Peer Review of Competition Law and Policy in Namibia at its 14th Session held in Geneva, Switzerland, from July 7-11, 2014 made some recommendations to be included in the amended law.
The experts recommended the Act to provide a clear distinction between the treatment of horizontal agreements and vertical agreements, and between hard-core cartel and other “softer” horizontal agreements.
“It was found that while the Commission’s enforcement of the merger control provisions of the Act was impressive, its enforcement of the Restrictive Business Practices (RBPs) provisions had lagged far behind,” the IGE report seen by The Southern Times states in part.
The report added that, “There is also a need for a clear separation of the Commission’s investigative and adjudicative functions.”
Not all SADC countries have amended their Acts though as countries like Zimbabwe are still using the same Competition Act which formally adopted a competition policy and law in 1996 with the enactment of the Competition Act.
The Act became operational in 1998 and in that year the Competition and Tariffs Commission was established to enforce the Act.
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More Comesa members scrap visa requirement for travellers
The vision of free cross-border movement within the 19-member Comesa bloc has drawn closer to reality after three more states scrapped the visa requirement for travellers.
Mauritius, Rwanda and Seychelles have scrapped visas on nationals of Comesa member states while Zambia has issued a circular waiving visas for the region’s citizens who travel for official business only.
The decisions are part of efforts to implement the bloc’s Protocol on Free Movement of Persons, Services, Labour and Rights of Establishment and Residence in the region.
“Although, we have not recorded new signatures and ratifications, a number of member states have showed strong commitment and promised to speed-up the process of signing and ratifying the protocol. The government of the Republic of Zambia has sent an official letter which states that the Protocol will soon be signed,” Mr Houssein Guedi Absieh, the Immigration Officer at Comesa, said.
So far four countries; Burundi, Kenya, Rwanda and Zimbabwe have signed the protocol on free movement of persons. Only Burundi has fully ratified it.
Kenya and Rwanda are, however, already fully complying with most of the provisions of the protocol before it is fully implemented by the bloc. The two countries have promised to ratify the protocol soon.
The ease of movement within the 19-member Comesa bloc is set to be received positively in Kenya which has made the bloc its single-most important destination for export. Official data indicates that the region accounted for 33 per cent of the Sh502 billion worth of exports that Kenyan made in 2013.
The red tape involved in the application and payment for visas has frequently been cited among causes of delays in intra-Comesa trade.
Faced with headwinds caused by the global economic slowdown, many businesses are increasingly turning to regional markets such as Comesa and the East African Community (EAC) to boost their performance.
Many countries in the region have entered into a Free Trade Area (FTA) pact under Comesa to grow their trade volumes.
Under FTA a designated group of countries agrees to eliminate tariffs, quotas and preferences on most (if not all) goods. Kenya is targeting to grow its stake in Comesa with the planned free trade zone (FTZ) at Dongo Kundu, Mombasa.
“The intent of the FTZ is to boost intra-Africa trade within the East, Southern and Central Africa region where goods can be imported into the zone and out of Kenya duty-free," Industrialisation Principal Secretary Wilson Songa said in an earlier presentation. The FTZ project will be established on a site of between 300 and 500 acres which is readily accessible to investors.
It will host wholesale and retail trading, breaking bulk, re-packaging logistics, warehousing and handling and storage of goods, among others.
Reserved for re-exports
Unlike the current practice at Mombasa port where all goods are subjected to slow customs procedure, an FTZ creates a haven where goods on transit face less strict customs regulations.
The area will be reserved for re-exports to the 400 million-people Comesa bloc, allowing for transhipment of cargo without inspection or paying customs duty.
The Comesa bloc is already the single-largest export destination for Kenya’s goods accounting for 35 per cent of Sh517.9 billion worth of goods exported in 2012.
“The FTZ is a proven development model which attracts foreign and domestic investors, stimulates local, regional and international trade, improves a country’s business climate and reduces the cost of doing business,” the PS said.
Globally, FTZs are organised around major seaports, international airports and generally underdeveloped areas.
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SA no longer only gateway
South Africa was no longer the only gateway into Africa as other ports elsewhere in the continent were heavily investing in infrastructure making the trade business more competitive.
This is according to Jonathan Horn, the managing director for Mearsk Line Southern Africa.
Horn said yesterday, during the group’s global results report in Durban, that ports in east and west Africa were slowly catching up with South Africa’s ports.
Horn said although South Africa made up a sizeable proportion of the Mearsk business, “it was no longer the only gateway to the continent”.
“If you look at the emerging markets of West and East Africa, they are slightly smaller, but their growth rates there are increasing significantly and on a much higher level.”
“It is certainly not the only gateway to Africa anymore. It is an important gateway and would continue to be so but its not the only gateway,” he said.
Transnet Port Terminal (TPT) is in charge of all the seven ports in the country.
The biggest of the seven ports being the Port of Durban.
All seven commercial South Africa’s ports handle about 7.4 million twenty-foot equivalent units (TEUs) per annum.
The Port of Durban houses the Durban container terminal, which handles about 2.7 million TEUs of cargo a year.
Mearsk, which is one of Transnet’s biggest customers and the world’s largest shipping liner, said in its global results report that the volume of imports and exports into South Africa fell by 3 percent in 2014, which was attributed to the lack of demand as well as mining sector strike.
Mearsk said trade within the African market, excluding South Africa, was expected to grow around 10 percent over the next five years.
“From February and as a clear signal of Mearsk Line’s commitment to the African continent and our view of the growth potential, we have launched a direct vessel service from South Africa to both west African coast and the Middle East,” said Horn.
Jim Farara, the deputy head of Africa liner operations cluster at Mearsk, agreed that ports were getting more competitive in terms of infrastructure expansion as well as efficiencies.
“What is important is that we get value for money, when rates are going up we need to see the productivity improvement,” Farara added.
“As a shipping liner we are looking for good productivity rates and pay for that. If the rates are inflationary they should at least be linked with productivity in that port, we have seen satisfactory improvement in Durban when compared with other ports.”
Capital projects
Transnet plans to spend about R17 billion in capital projects in the Port of Durban in the next seven years, this will include deepening of the berths in the busiest and biggest part of the port, Pier 2.
Horn was also impressed by the amount of work done by TPT in the Durban container terminal. “The amount of work done by Transnet, in terms of infrastructure at its ports was encouraging.”
He said it was like living in the house that was going through renovations.
“We know that there is a bigger price down the line and we work closely together to make sure the disruption was minimal.
“Of course it is not pain free but we work together to minimise that.” He added that expansions were happening a little bit ahead of the curve and the worst thing that one could do is to run of capacity and then you had to start building.
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Heavy importation threatening local manufacturers, says BoI
Apparently worried by the high level of low capacity utilization occasioned by huge imports of goods that could be produced locally, the Bank of Industry (BoI) has advocated the expansion of protectionist policy for indigenous producers, even as it pledged to sustain support for local manufacturers.
According to the bank, commitment to a protectionist policy is imperative in curbing the importation of products that could be produced locally.
Speaking after a facility tour of Momas Electricity Meters Manufacturing Company Limited (MEMMCOL) and WEMPCO steel and ceramics production facilities, the Managing Director of BoI, Rasheed Olaoluwa, observed that local manufacturers have the capacities to meet local demand and end reliance on foreign alternatives, with the enactment of protectionist policies.
According to Olaoluwa, a major strategic step we can take here is to protect local firms that can produce what Nigeria needs; we do not need to import what we can produce.
“I must say that I am very impressed by the level of technology on display here. People who have an engineering background would understand what I mean here. I saw semi-conductors, integrated electric circuit and the process of making these circuits. It is the first time this is happening in Nigeria. The key issue is, we have a company in Nigeria that is owned by a Nigerian and that has the capacity to supply almost all of the electricity meters that we need in this country.
“For me, there is an industrial policy issue here. BoI wants to help Nigerian companies like this that have the capacity to produce what Nigerians or Nigerian businesses require. We don’t need to import such things. This is one of the reasons why our foreign reserve has been under pressure. We keep importing what we produce locally. I think the major strategic step for our country to take is to come out with an industrial policy to ensure that any company we have identified as having capacity to produce items locally, such companies are given support and patronized”, he added.
While at the WEMPCO plant, which converts steel billets to wire rods for the production of wire mesh, nails and other finished products, Olaoluwa noted that the facility was the first of its kind in the country.
“We are seeing a company that is producing to international quality standards. Government should do all it can to protect them, there is no justification for the continued imports; ex-factory price here is even cheaper than imported alternatives.
He noted that supporting companies in this manner, would scale up their human resource capacities and curtail export of Nigerian jobs to other countries.
Olaoluwa, reiterated that government’s Nigerian Industrial Revolution Plan was meeting its objectives and that the country was already on the right track to being self-sustaining.
“We encourage the manufacturers themselves to also patronise each other in terms of semi raw materials and production machineries,” he said.
He disclosed that BoI is on the verge of launching a renewable off-grid electricity concept that would be commercially viable and the ministry of power is assisting the development bank secure licenses for its take-off.
“As a development bank with catalytic role, we noticed a lot of talk about diversification of sources of power. What we do is to take the lead and encourage the private sector. We are using it to demonstrate to the business community that off-grid power is possible and viable, hopefully other banks will follow suit,” he said.
He said the development bank will continue to support processors, manufacturers and product developers in the agro; energy & gas; solid minerals and metals sectors of the economy.
In his remarks, the Managing Director of WEMPCO, Tung Robert, said: “BoI is really helping the industrialisation of Nigeria and without their help, we would not have had long-term facilities that have helped us sustain the production process especially in power generation.”
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South Africa awaits patent reforms with hope, concern
South Africa’s new policy on patents could go to the Cabinet for approval soon, says Doctors without Borders (Médecins Sans Frontières, MSF), one of the organisations spearheading the Fix the Patent Laws campaign in the country.
The draft intellectual property policy has been circulated for comments since its release in September 2013.
Reaching the Cabinet paves way to debate before the draft comes into law.
According to Julia Hill, MSF access advocacy officer, government promises made in recent months indicate that the new policy could come soon.
Hill said the Department of Trade and Industry (DTI) said in October the final policy would go to Cabinet for approval by the end of 2014 – a deadline which was missed – and at the end of last year, noted on Twitter that the policy would be finished in February 2015.
She said the DTI patents office announced at the national IP summit in October 2014 that a patent examination system would be set up and will start training 20 examiners from April 2015. The examiners will prioritise pharmaceutical and mining patents.
Efforts to confirm the latest date were unsuccessful at the time of going to press.
In Hill’s opinion, South Africa is moving in the right direction with policy reform.
The draft policy clearly states the need for laws that will protect people’s health needs ahead of pharmaceutical companies’ exorbitant profit margins, she said.
Hill said there could be consequences for further delays in carrying out the reforms.
“The longer we delay, the more medicines are patented, and the more battles we will be fighting for important drugs at affordable prices in the future,” she told Intellectual Property Watch.
A year ago – in January 2014 – McDonald Netshitenzhe, chief director for IP policy at DTI, was quoted in the Business Day as saying the draft was expected to be submitted to the Cabinet in March 2014.
Fixing the Flaws
The Fix the Patent Laws (FTPL) campaign, pegged on accessing affordable medicines for all people living in South Africa, has been working on the issue since November 2011.
FTPL was started by the Treatment Action Campaign, Doctors without Borders and SECTION27.
Health activists accused South Africa of registering any patent whose paperwork was filed and fees paid for, rather than examining applications to assess whether they meet innovation criteria.
They alleged that pharmaceutical companies have exploited South Africa’s system by ever-greening – making minor changes to medicines that were already on the market to gain additional 20-year patents that block competition by affordable generic versions – which has meant that excessive number of drug patents were granted.
Close to 50,000 people worldwide in 2014 signed petitions condemning an underground attempt by multinational pharmaceutical companies to delay reform, and supported the South African government to finish the national IP policy.
According to MSF, patented medicines in South Africa can cost up to 35 times more than in countries like India, where robust generic competition exists. DTI statistics indicate that the current IP system not only hurts patients, but also the South African economy, advocates said. Imported medicines are the fifth largest contributor to South Africa’s trade deficit, which is driven mostly by high costs of patented drugs.
Hill said a change in the law could bring relief to the public sector as the Department of Health grapples with sustaining the 2.4 million South Africans on antiretroviral treatment and the affordability of much-needed second-line and third-line ARVs as more people develop resistance to first-line drugs.
Getting the second-line HIV drug lifeline is more than double the cost of affordable first-line drugs, while third-line treatments are 15 times more expensive, she said.
Kate Ribet, MSF spokesperson, said indications are that South Africa will introduce a number of pro-public health reforms, or make some existing laws easier to implement.
Closer examining of patent applications, and stricter selection criteria to determine a patent will help to reduce a practice called ever-greening, where companies can maintain monopoly periods, and the ability to charge high prices for longer, Ribet said.
Linda Greeff of People Living With Cancer (PLWC) agreed.
“We want to see ever-greening being stopped and a more ethical practice that will ensure that new developments in oncology will be accessible for state and private oncology patients at affordable prices,” Greeff told Intellectual Property Watch.
Concern for Investment, Innovation
Differences on what the reforms should be and should not, however remain numerous.
Anthea Jeffery, head of policy research, Institute of Race Relations, warned in @Liberty, IRR’s occasional paper in October 2014, that if translated into law, the proposals will reduce the impetus for local innovation.
He said such reforms will give potential investors an impression that South Africa is a ‘rogue’ state with scant regard for property rights or the rule of law.
Jeffery said the DTI’s policy proposals attracted some 115 comments [Note: the comments are not publicly available online], critical of plans to reduce the prices of medicines by allowing more competition from generics and promoting local industrialisation by encouraging the growth of a domestic generic manufacturing sector.
The Innovative Pharmaceutical Association South Africa (IPASA), representing companies that make “innovator” medicines, which are protected by patents and have no competition from generic copies, supports the broader objectives of the draft IP policy, but it has a bone of contention.
IPASA said it hails empowering all sections of South African society, contributing to development, improving IP enforcement, promoting research and development and improving national compliance with international treaties.
“These are pillars of growth and development, and attracting foreign direct investment,” said Konji Sebati, IPASA, chief executive officer, and a recent officer at the World Intellectual Property Organization.
Sebati said they would like to see an IP regime and a patent system that promotes innovation, respects the rights of inventors, granting them their patent rights to make and sell their new products, without competitors being allowed to copy them.
“In essence, the inventor, the patent holder, should be rewarded for his/her creativity, insight, and costly research and development, and should be given a ‘window of opportunity’ for the exclusive exploitation of his innovation,” Sebati told Intellectual Property Watch.
She said this system brings about much-talked about balance, and benefits all, including the patent holder, and then everyone else can copy, sell, or otherwise use this innovation after 20 years – which she noted includes the many years of R&D and the many years waiting for the medicine to be approved by the Regulatory Authority.
“I cannot stress enough that without a robust research-based pharmaceutical industry, there will be no generics, there will be nothing to copy from, and that will be a very sad day for patients, and communities at large,” Sebati said.
IPASA hopes that the government will not intentionally want to “hurt the very golden goose that lays the medicine eggs,” but will find ways to engage with the industry in a spirit of partnership in the welfare and healthcare of the millions of South Africans, she said.
Purpose in Numbers
The fight for cheaper medicines in South Africa has, however, not slowed down. People Living With Cancer (PLWC) joined the campaign on 5 February, World Cancer Day.
“The sign on by People Living With Cancer was a very important step in the campaign’s work,” said Ribet.
The patient cancer groups have been traditionally suspicious of any attempts to put pressure on pharmaceutical companies to lower prices, as they fear that this will cause these companies to disinvest in R&D and withdraw their life saving treatments, she said.
The fear was unfounded as there were documented cases where pharmaceutical companies have reduced prices when put under consumer or government pressure, Ribet added.
Greeff of PLWC said they joined the campaign because the initiative is fighting cancer advocacy issues on many levels, cancer stigma, poor services delivery, broken machines and lack of transport for patients.
She says cancer drugs in South Africa are unacceptably high and more effective medicines could be so expensive that sometimes they are beyond the reach of patients in the public sector adding that some patients were forced to fork out of pocket payments or battle with medical aid schemes to get access to the right drugs.
Greeff said trastuzumab, an effective treatment for early stage breast cancer patients in use for many years, currently costs about R24,000 (US$2000) for a patient every three weeks.
“There is no similar drug currently – a generic will not be possible for some time, that can compete, as far as our medical team knows,” she said.
Greeff said reforms must open doors for more transparency in determining cancer drug prices.
She said when new drugs are registered the drug company should base their price on the cost of R&D plus a mark-up of 100 per cent, but not more than that.
As South Africa awaits new IP reforms, it’s apparent that both parties, for and against, have genuine grievances, and one hopes an amicable solution will be found to balance the competing interests.
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EAC grapples with high business costs
The cost of doing business across the East African Community remains high, in spite of the efforts being made by Partner states and with the support of Development Partners.
In addition, 24 non-tariff barriers (NTBs) still remain unresolved, the just-ended 16th ordinary EAC Summit was told in Nairobi.
“This denies us the opportunity to unlock the immense potential of regional integration and starves businesses of innumerable opportunities,” President Uhuru Kenyatta of Kenya said during the 16th Summit of the regional leaders in Nairobi.
He was handing over the Chair of the Summit to President Jakaya Kikwete of Tanzania.
“To grow intra-Community trade, we need to implement decisive solutions without delay,” he said.
The Kenyan leader said NTBs still complicate businesses in the region. These are also impediments to East Africa’s competitiveness as a global investment destination denying the EAC Bloc unaccountable business and investment opportunities.
“NTBs must go. I am glad to note that our Council of Ministers (the policy organ of the Community) has introduced a legal framework aimed at moving this agenda forward,” he said. Kenyatta also acknowledged the high cost of roaming calls across the region, describing it as yet another unnecessary impediment to trade and communication in the bloc.
“It is unacceptable that in many instances, calling outside our continent is much cheaper than communicating within our region,” he said.
He called for urgent interventions by relevant regulatory authorities on the issue.
However he appreciated the One-Area-Network initiated by Rwanda, Uganda and Kenya recently. The network has reduced the calls to about 12 US cents per minute.
He said he was hopeful other EAC member countries, Burundi and Tanzania, would join the system later.
The EAC Council of Ministers has been directed to expedite implementation of the framework for harmonised EAC roaming charges, including the removal of surcharges for international telecommunications traffic originating and terminating within EAC by July 15, this year.
On the One-Stop-Border-Post (OSBP) to be operationalised soon at the Rusumo, Lunga Lunga/Hororo and Taveta/Holili, Kenyatta said they will reduce clearance time of cargo by 40%. President Jakaya Kikwete lauded the increased intra-EAC formal trade to $5.8 billion in 2013 from $3.7 billion in 2010 and a 6.1 per cent increase in trade between 2012 and 2013, saying it is no small achievement.
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International Women’s Day 2015: Transition Support Department brainstorms on women’s empowerment and economies
This week the African Development Bank has organized a series of events at its headquarters in Abidjan leading up to International Women’s Day (IWD) 2015 on March 8. On Tuesday March 3, the Transition Support Department (ORTS), formerly Fragile States, held a brainstorming session on “Empowering women, empowering economies,” under the leadership of the Bank’s Special Envoy on Gender (SEOG), Geraldine Fraser-Moleketi.
The time has come to celebrate African women’s acts of courage and determination within the framework of their role in their communities, observed the participants of a roundtable discussion co-chaired by ORTS Director Sibry Tapsoba and Fraser-Moleketi.
Several participants took the floor and delivered powerful testimonies on the role of women in building resilience in fragile situations.
During the interactive session, participants discussed strategies and challenges related to financial inclusion and women’s economic empowerment. Most speakers made a call to increase measures to educate and protect girls and women from sexual abuse and exploitation, and to strengthen their role in the community and society.
More specifically, participants recognized women’s role in peace-keeping and in Africa’s development, and the need to build resilience and strengthen their economic empowerment. Participants reflected on how the Transition Support Department could provide further support to Operations in fragile situations. They also discussed the Bank’s approach to addressing fragility and building resilience, one that aims to promote the participation of women in peace-building and state-building processes at all levels, while paying particular attention to the impact of gender-based violence that often accompanies conflict. Other key areas highlighted by the meeting was how ORTS would work with the Special Gender Envoy’s Office, to introduce more gender-sensitive interventions that are tailored to the distinct realities seen in fragile situations.
The ORTS Department prepared a knowledge product, “Gender and Fragility: Five Key Areas to Consider” as part of the activity to mark the celebrations. The product is meant to serve as guidance on gender and fragility for Bank Operationsand focuses on key areas to be considered when working on gender in fragile situations. These are: (i) Assessing fragility from a gender perspective, (ii) Creating economic opportunities for women in fragile situations, (iii) Promoting social inclusion, (iv) Building capacities, and (v) Tackling gender-based violence.
Expectations on the Bank’s events for 2015 IWD remain high, as the Private Sector Department (OPSM) and ORTS Departments are expected to undergo some candid discussions, while the Bank’s Finance Vice-Presidency (FNVP) will discuss issues of financing, including the viability of a gender bond. A roundtable is planned for Friday, March 6, and seeks to examine how to bring about transformational change through infrastructure.
The Tuesday event was the AfDB’s first public event on IWD 2015, focusing on women’s economic empowerment in the context of Africa’s development. Activities are taking place all week and the Bank’s Field Offices (FOs) will be linked to events in Abidjan via video-conferencing. FOs have been encouraged to undertake country-level events to commemorate this important day.
Bank staff members have been specially invited to a panel discussion on Women, Leadership and Harassment on Wednesday at 9:30 a.m. GMT. The Special Envoy strongly urges participation in these issues by all corners of the AfDB’s staffing architecture.