The Democratic Republic of Congo, Rwanda and Burundi have relaunched a regional economic bloc that is seen as a key step in restoring peace and stability in the turbulent central African region. The Great lakes Countries Economic Community, known under its French acronym CEPGL, was created in 1976 to ease trade and free movement of people in the three countries.
It collapsed in 1994 following years of brutal wars in the region.
"The relaunching of the CEPGL today shows the determination of our three countries to strengthen peace and security in our region," Rwanda's foreign affairs minister, Charles Murigande, said in mid-April. "United we will make our region more powerful, and the government of Rwanda is committed to make this union a reality," he said, addressing foreign affairs ministers from the other two partner states.
Belgium and the European Union contributed to the community's relaunch and Louis Michel, the EU aid commissioner announced a 50 million Euro grant to support it.
CEPGL has three key institutions, the Economic and Development Bank of Great lakes countries, the Energy of Great Lakes, both based in the DRC, and the Institute of Agricultural Research and Zoology in Burundi.
Engineering News
April 30, 2007
EU says West Africa trade talks may stretch to 2008
The European Commission is pressing West African governments to negotiate a deal on trade before a WTO waiver on current trade perks expires on December 31, but acknowledged in late April that a short extension may be needed.
The World Trade Organisation (WTO) outlawed the EU's preferential trade terms for nearly 80 of its African, Caribbean and Pacific (ACP) former colonies in 2001, but granted a waiver until the end of 2007. Brussels is negotiating with six regional blocs including the Economic Community of West African States (ECOWAS) to sign Economic Partnership Agreements (EPAs) phasing in freer trade over a number of years.
"If we find ourselves not having signed by December 31, we will be in a very, very difficult position with the WTO," said Gilles Hervio, head of the European Commission delegation in Senegal. "If we make progress, if things have moved forward ... I think we will be in a very strong position with the WTO to say we need a little more time, and to negotiate a postponement, but only a few months." Hervio said that even if December 31 slipped, it was important to work towards the deadline so as not to lose momentum. "If we say there is no date, in five years we will find ourselves in exactly the same position," he said.
ECOWAS heads of state and ministers have proposed extending the current trade terms by two or three years to allow more time to reach a new deal, but the countries agreed in Brussels in February to work towards the end-of-year deadline.
Criticism has mounted in recent months over the EU's insistence that the agreements be signed by December 31. UK-based aid agency Oxfam International called for Brussels to offer preferential trade terms to ACP countries under the same enhanced "generalised system of preferences" scheme it has for some other countries, mainly in Latin America. Hervio said he was studying the proposal.
Oxfam and fellow campaign group Third World Network Africa said that would allow the negotiation of a better deal. "As the deadline draws close, exporters are becoming alarmed at the prospects of facing high tariffs into the EU market. The EU appears to be "watching the clock", hoping that as pressure mounts, ACP countries will have no option but to accept their proposals," they said.
Most ECOWAS member states will see little change after December 31 even without a new deal, because they will still benefit from preferential exports under the EU's "Everything But Arms" initiative for very poor countries. But the region's heavyweight economies; Nigeria, Ivory Coast and Ghana, are not eligible for the initiative, so some exports would be hit with increased tariffs.
Brussels has offered duty-free access to Europe for all EPA signatories, with interim exceptions only for rice and sugar. The proposed deals also aim to phase out tariffs on ACP imports from Europe over a number of years, but depend on each regional bloc agreeing a common external tariff and a list of exempt products which will retain tariff protection.
Reuters
The World Trade Organisation (WTO) outlawed the EU's preferential trade terms for nearly 80 of its African, Caribbean and Pacific (ACP) former colonies in 2001, but granted a waiver until the end of 2007. Brussels is negotiating with six regional blocs including the Economic Community of West African States (ECOWAS) to sign Economic Partnership Agreements (EPAs) phasing in freer trade over a number of years.
"If we find ourselves not having signed by December 31, we will be in a very, very difficult position with the WTO," said Gilles Hervio, head of the European Commission delegation in Senegal. "If we make progress, if things have moved forward ... I think we will be in a very strong position with the WTO to say we need a little more time, and to negotiate a postponement, but only a few months." Hervio said that even if December 31 slipped, it was important to work towards the deadline so as not to lose momentum. "If we say there is no date, in five years we will find ourselves in exactly the same position," he said.
ECOWAS heads of state and ministers have proposed extending the current trade terms by two or three years to allow more time to reach a new deal, but the countries agreed in Brussels in February to work towards the end-of-year deadline.
Criticism has mounted in recent months over the EU's insistence that the agreements be signed by December 31. UK-based aid agency Oxfam International called for Brussels to offer preferential trade terms to ACP countries under the same enhanced "generalised system of preferences" scheme it has for some other countries, mainly in Latin America. Hervio said he was studying the proposal.
Oxfam and fellow campaign group Third World Network Africa said that would allow the negotiation of a better deal. "As the deadline draws close, exporters are becoming alarmed at the prospects of facing high tariffs into the EU market. The EU appears to be "watching the clock", hoping that as pressure mounts, ACP countries will have no option but to accept their proposals," they said.
Most ECOWAS member states will see little change after December 31 even without a new deal, because they will still benefit from preferential exports under the EU's "Everything But Arms" initiative for very poor countries. But the region's heavyweight economies; Nigeria, Ivory Coast and Ghana, are not eligible for the initiative, so some exports would be hit with increased tariffs.
Brussels has offered duty-free access to Europe for all EPA signatories, with interim exceptions only for rice and sugar. The proposed deals also aim to phase out tariffs on ACP imports from Europe over a number of years, but depend on each regional bloc agreeing a common external tariff and a list of exempt products which will retain tariff protection.
Reuters
Pre-production oil dollars start flowing in Uganda
Communities in Uganda's western districts of Hoima and Buliisa, where oil wells have been discovered, are already benefiting from the exploration process ahead of 2009, when Uganda is expected to start producing oil.
General manager of Tullow Oil Uganda, John Morley, said that they have so far invested about $1million for social infrastructure. The company has so far drilled four oil wells and was in the process of drilling a fifth. Morley said that they would soon put up a refinery within the discovery area, where Uganda is expected to begin oil production by 2009."We want the lives of the communities around here to change for the better," he said. "We have plans to do a lot of development in these areas. We have already opened 276 km of the road and put up boreholes in major villages. We have also started building schools and health centres."
Tullow Oil Uganda Limited and Heritage Oil and Gas Limited are the companies licensed to produce oil in Hoima and Buliisa districts. Minister for mineral development Kamanda Bataringaya said apart from oil experts, other workers recruited are from the communities. Area MP Tom Kyahurwenda said his people are happy with the social responsibility extended by oil companies and are eagerly waiting for the first production. "The projects have improved the welfare of the people. We trust that the government will be transparent to make sure that the oil benefits Uganda as a country. It's a national asset and the government should be transparent," he said.
A local official said, "We had no roads before. This area was hard to reach but we can now access it because of oil. We are sure we shall benefit more when we begin production." he said. In Kyehooro, the discovery area, Tullow has built a primary school and equipped it for the fishing community. They are also constructing a maternity centre for the women and have constructed several boreholes for drinking water. They are planning to install solar power and put up projects related to HIV/Aids awareness. They have trained traditional birth attendants, put up bee-hive projects, trained the fishing community and paid some of the teachers' salaries in the area.
In Buliisa district Tullow security coordinator Eugene Fourie said they would fight poverty among the communities. "We are working hand in hand with the communities and we want them to benefit from this oil exploration. We engage them in projects that can better their health and fight poverty. They have shown us a positive attitude." He said the company has provided bicycle transport for police officers, soccer balls for schools and free medical care for the communities.
Emmanuel Dombo, chairman of the Ugandan Parliament's Natural Resources Committee, said they were happy with the progress so far but asked the government to avail the oil production and share agreement to enable Parliament and the people monitor the project. "The project is okay and these people are showing good social responsibility but we want the government to consider making public what they agreed upon. We want to know the period of cost recovery and the sustainability of the project thereafter," he said.
Minister Bataringaya said the oil production share agreement would only be important when oil production begins. He said the government would have an upper hand in the agreement. "What we should talk about now is the exploration agreement. The moment we begin production, which will be soon, the agreement will be made public. We first have to know how much we shall produce, agree on the cost recovery and then share the rest," he said.
"We cannot begin talking about percentage before we begin producing...we shall be producing 4000 barrels every day. We have requested the company to start on the earlier production and by 2009, we shall have heavy fuel oil, kerosene and diesel."
The Monitor
General manager of Tullow Oil Uganda, John Morley, said that they have so far invested about $1million for social infrastructure. The company has so far drilled four oil wells and was in the process of drilling a fifth. Morley said that they would soon put up a refinery within the discovery area, where Uganda is expected to begin oil production by 2009."We want the lives of the communities around here to change for the better," he said. "We have plans to do a lot of development in these areas. We have already opened 276 km of the road and put up boreholes in major villages. We have also started building schools and health centres."
Tullow Oil Uganda Limited and Heritage Oil and Gas Limited are the companies licensed to produce oil in Hoima and Buliisa districts. Minister for mineral development Kamanda Bataringaya said apart from oil experts, other workers recruited are from the communities. Area MP Tom Kyahurwenda said his people are happy with the social responsibility extended by oil companies and are eagerly waiting for the first production. "The projects have improved the welfare of the people. We trust that the government will be transparent to make sure that the oil benefits Uganda as a country. It's a national asset and the government should be transparent," he said.
A local official said, "We had no roads before. This area was hard to reach but we can now access it because of oil. We are sure we shall benefit more when we begin production." he said. In Kyehooro, the discovery area, Tullow has built a primary school and equipped it for the fishing community. They are also constructing a maternity centre for the women and have constructed several boreholes for drinking water. They are planning to install solar power and put up projects related to HIV/Aids awareness. They have trained traditional birth attendants, put up bee-hive projects, trained the fishing community and paid some of the teachers' salaries in the area.
In Buliisa district Tullow security coordinator Eugene Fourie said they would fight poverty among the communities. "We are working hand in hand with the communities and we want them to benefit from this oil exploration. We engage them in projects that can better their health and fight poverty. They have shown us a positive attitude." He said the company has provided bicycle transport for police officers, soccer balls for schools and free medical care for the communities.
Emmanuel Dombo, chairman of the Ugandan Parliament's Natural Resources Committee, said they were happy with the progress so far but asked the government to avail the oil production and share agreement to enable Parliament and the people monitor the project. "The project is okay and these people are showing good social responsibility but we want the government to consider making public what they agreed upon. We want to know the period of cost recovery and the sustainability of the project thereafter," he said.
Minister Bataringaya said the oil production share agreement would only be important when oil production begins. He said the government would have an upper hand in the agreement. "What we should talk about now is the exploration agreement. The moment we begin production, which will be soon, the agreement will be made public. We first have to know how much we shall produce, agree on the cost recovery and then share the rest," he said.
"We cannot begin talking about percentage before we begin producing...we shall be producing 4000 barrels every day. We have requested the company to start on the earlier production and by 2009, we shall have heavy fuel oil, kerosene and diesel."
The Monitor
April 29, 2007
Senegal welcomes Dubai developers with open arms
Senegal is inviting Dubai's developers to build master-planned communities in the West African country, which is opening its doors to Arab investors, a top official said.
Dubai World, the parent entity of DP World, Economic Zones World, Jafza International, Nakheel, Limitless and Istithmar, were granted land to develop a free zone in Senegal In 2006 close to its new international airport, the official said.
"We have granted land to Dubai World to develop a free zone near Dakar," Senegal's President Abdoulaye Wade said in Dubai in mid-April. "We are also discussing granting land to Dubai's developers to build properties in Senegal. We are currently building a new capital city where lots of investment opportunities in real estate will emerge," he said. "We want Dubai's developers to invest in Senegal and build those neighbourhoods."
Wade was on a state visit to the UAE to strengthen relations, which, he said, will open windows of opportunity for both countries. "We have a strong relationship with the UAE and other countries in the region and my visit here is to further strengthen that relationship," he said. "We have invited the UAE's airlines, especially Emirates, to start services to Senegal, which they are considering and if everything works out well, we expect them to start flights to Senegal in 18 months time," he said.
In December 2006, Dubai-based Thani Investments was awarded a licence in the Cayar block north of Dakar in Senegal's shallow offshore waters to drill for oil. Dubai's Nakheel, Emaar and Dubai Holding is developing projects in India, Pakistan, Egypt, Turkey, Tunisia, Algeria and Morocco, among other countries. However, this would mark their first foray into West Africa.
Jafza International is discussing with the Senegal Government the terms of the concession for 10,000 hectares (100 million square metres) of land to set up an integrated Special Economic Zone 40 kilometres south of Dakar. The project will be developed in four phases. The initial development is expected to create approximately 30,000 jobs. Jafza International has played a central role in drafting one of the most comprehensive legal frameworks for economic zones in all of Africa. It was made law in February.
Jamal Majid Bin Thaniah, Vice Chairman of Dubai World, and Group CEO of Ports and Free Zone World, said in a statement, "Jafza International's presence in Senegal will not only bind the two countries closer, but will also act as a catalyst in significantly increasing two-way trade between Dubai and Dakar."
There has been a significant jump in free zone trade with Senegal in recent years. Free zone exports to Senegal increased from 14.765 million Dirham (US$40 million) in 2005 to Dh18.630 million in 2006, according to Dubai Customs. Direct imports from Senegal through non-free zone ports during 2006 were valued at Dh83.758 million, while goods worth Dh25.780 million were exported to the West African nation. Re-exports were valued at Dh232.175 million during 2006.
Gulf News
Dubai World, the parent entity of DP World, Economic Zones World, Jafza International, Nakheel, Limitless and Istithmar, were granted land to develop a free zone in Senegal In 2006 close to its new international airport, the official said.
"We have granted land to Dubai World to develop a free zone near Dakar," Senegal's President Abdoulaye Wade said in Dubai in mid-April. "We are also discussing granting land to Dubai's developers to build properties in Senegal. We are currently building a new capital city where lots of investment opportunities in real estate will emerge," he said. "We want Dubai's developers to invest in Senegal and build those neighbourhoods."
Wade was on a state visit to the UAE to strengthen relations, which, he said, will open windows of opportunity for both countries. "We have a strong relationship with the UAE and other countries in the region and my visit here is to further strengthen that relationship," he said. "We have invited the UAE's airlines, especially Emirates, to start services to Senegal, which they are considering and if everything works out well, we expect them to start flights to Senegal in 18 months time," he said.
In December 2006, Dubai-based Thani Investments was awarded a licence in the Cayar block north of Dakar in Senegal's shallow offshore waters to drill for oil. Dubai's Nakheel, Emaar and Dubai Holding is developing projects in India, Pakistan, Egypt, Turkey, Tunisia, Algeria and Morocco, among other countries. However, this would mark their first foray into West Africa.
Jafza International is discussing with the Senegal Government the terms of the concession for 10,000 hectares (100 million square metres) of land to set up an integrated Special Economic Zone 40 kilometres south of Dakar. The project will be developed in four phases. The initial development is expected to create approximately 30,000 jobs. Jafza International has played a central role in drafting one of the most comprehensive legal frameworks for economic zones in all of Africa. It was made law in February.
Jamal Majid Bin Thaniah, Vice Chairman of Dubai World, and Group CEO of Ports and Free Zone World, said in a statement, "Jafza International's presence in Senegal will not only bind the two countries closer, but will also act as a catalyst in significantly increasing two-way trade between Dubai and Dakar."
There has been a significant jump in free zone trade with Senegal in recent years. Free zone exports to Senegal increased from 14.765 million Dirham (US$40 million) in 2005 to Dh18.630 million in 2006, according to Dubai Customs. Direct imports from Senegal through non-free zone ports during 2006 were valued at Dh83.758 million, while goods worth Dh25.780 million were exported to the West African nation. Re-exports were valued at Dh232.175 million during 2006.
Gulf News
More Kenya-Malaysia trade urged
Malaysian Prime Minister Abdullah Ahmad Badawi called on his county's business community to diversify and expand trade with Kenya. He said this during a two-day visit to the East African nation in mid-April. He wanted the private sector to also explore possibilities not only in manufacturing, but also in the related services and in the oil and gas industry, both in upstream and downstream activities.
" To date, investment cross-flows between the two countries are limited," he said at the Malaysia-Kenya Business Forum, held in conjunction with his visit. Abdullah was on an eight-day official visit to Kenya, Namibia and Sudan. "Kenya has agricultural and mineral resources, while Malaysia's comparative advantage is in secondary industrial products such as equipment and machinery, chemicals and chemical products. We have to take note that Malaysia also has much experience in the oil and gas sector, which, I believe has also become an emerging sector in Kenya," he added.
Abdullah said that Kenya's economic growth had strengthened considerably in recent years, with real Gross Domestic Product growth in 2005 to 2006 exceeding five per cent, the highest growth rate in well over a decade. Abdullah, who is also Malaysia's Finance Minister, said with Kenya's growth expected to remain robust this year in an environment of lower inflation, both countries would gain from strengthening their relationship.
He said although Kenya is Malaysia's 8th largest trading partner in Africa, the value of total bilateral trade in 2006 was still small, amounting to only US$90.3 million. "This figure accounts for less than 0.1 per cent of Malaysia's global trade. Malaysia's exports to Kenya totalled US$78.2 million while imports from Kenya was at US$12.1 million." But trade between the two countries is on the upward trend and there is indication for much expansion, he added.
Malaysia's exports to Kenya comprises palm oil, rubber, wood, chemicals, machinery and petroleum products while imports from Kenya include chemicals, agricultural produce and metal products.
Malaysian national oil company, Petronas, through its subsidiary ENGEN Kenya Ltd, is engaged in petroleum distribution activities throughout Kenya, while the Malaysian Construction Industry Development Board (CIDB) is in talks with Kenyan authorities for the planning and implementation of infrastructure projects.
Abdullah also urged the business communities of both countries to form joint ventures, strategic alliances or technological collaborations to explore investment opportunities. "While the private sector drives the business imperatives, the role of government is to create the environment which is conducive for investments to take root. Government officials on both sides have an important part in the creation of such an environment." He also said there was a need to conclude an Investment Guarantee Agreement. Such an agreement would facilitate the systematic liberalisation, promotion as well as protection of investments, he said.
" To date, investment cross-flows between the two countries are limited," he said at the Malaysia-Kenya Business Forum, held in conjunction with his visit. Abdullah was on an eight-day official visit to Kenya, Namibia and Sudan. "Kenya has agricultural and mineral resources, while Malaysia's comparative advantage is in secondary industrial products such as equipment and machinery, chemicals and chemical products. We have to take note that Malaysia also has much experience in the oil and gas sector, which, I believe has also become an emerging sector in Kenya," he added.
Abdullah said that Kenya's economic growth had strengthened considerably in recent years, with real Gross Domestic Product growth in 2005 to 2006 exceeding five per cent, the highest growth rate in well over a decade. Abdullah, who is also Malaysia's Finance Minister, said with Kenya's growth expected to remain robust this year in an environment of lower inflation, both countries would gain from strengthening their relationship.
He said although Kenya is Malaysia's 8th largest trading partner in Africa, the value of total bilateral trade in 2006 was still small, amounting to only US$90.3 million. "This figure accounts for less than 0.1 per cent of Malaysia's global trade. Malaysia's exports to Kenya totalled US$78.2 million while imports from Kenya was at US$12.1 million." But trade between the two countries is on the upward trend and there is indication for much expansion, he added.
Malaysia's exports to Kenya comprises palm oil, rubber, wood, chemicals, machinery and petroleum products while imports from Kenya include chemicals, agricultural produce and metal products.
Malaysian national oil company, Petronas, through its subsidiary ENGEN Kenya Ltd, is engaged in petroleum distribution activities throughout Kenya, while the Malaysian Construction Industry Development Board (CIDB) is in talks with Kenyan authorities for the planning and implementation of infrastructure projects.
Abdullah also urged the business communities of both countries to form joint ventures, strategic alliances or technological collaborations to explore investment opportunities. "While the private sector drives the business imperatives, the role of government is to create the environment which is conducive for investments to take root. Government officials on both sides have an important part in the creation of such an environment." He also said there was a need to conclude an Investment Guarantee Agreement. Such an agreement would facilitate the systematic liberalisation, promotion as well as protection of investments, he said.
Low exhibitor turnout for Zimbabwe trade showcase
The Zimbabwe International Trade Fair (ZITF) started on April 23 amid unprecedented secrecy over the total number of exhibitors who will showcase their products and services at the five-day exposition.
For the first time in years, a Press conference at which ZITF company officials traditionally name the guest of honour and give details on the number and profile of participating companies, was postponed twice. This triggered suspicion that the 48th edition of the ZITF had failed to attract a guest of honour, usually a foreign head of state and government. And when the Press conference was finally held, ZITF company board chairman, Nhlanhla Masuku, surprised journalists who attended the meeting by again refusing to disclose the number of participating companies.
He promised to do so the next day, but failed to do so. Instead, he preferred to dwell on his hope that the show "will be bigger and better than previous years," claiming that the quality of exhibits had improved on last year. "I am happy to say that during our tour this morning, it was evident that this year, we will have one of the best exhibitions in recent years," he said.
Indications were that the bulk of the exhibitors would be parastatals and small and medium scale enterprises (SMEs). Banks and government ministries and agencies sponsored most SMEs at the ZITF. ZimTrade, the national export promotion agency, sponsored 17, while the Zimbabwe Allied Banking Group sponsored 20. A number of other banks are also sponsoring other SMEs from among their clients.
President Robert Mugabe was to officially open the ZITF after African leaders apparently snubbed the fair. Traditionally, a high-profile figure delivers the keynote address and presents prizes at the event. In 2006 Tanzania President Jakaya Kikwete performed the functions.
In recent years, local and foreign companies have largely shunned the ZITF, the largest trade showcase in the country, as the economic crisis worsens. Major exhibitors from USA, Europe and South Africa, once regular participants at the fair, have snubbed it again this year. Even Botswana, is for the first time since independence not part of the event this year.
Although Masuku did not disclose the exhibitors for this year's fair, it is believed that less than 400 may attend, down from about 650 last year. Only 18 foreign companies, especially from India, China and Indonesia are participating, with none coming from the West.
Zimbabwe Journalists
For the first time in years, a Press conference at which ZITF company officials traditionally name the guest of honour and give details on the number and profile of participating companies, was postponed twice. This triggered suspicion that the 48th edition of the ZITF had failed to attract a guest of honour, usually a foreign head of state and government. And when the Press conference was finally held, ZITF company board chairman, Nhlanhla Masuku, surprised journalists who attended the meeting by again refusing to disclose the number of participating companies.
He promised to do so the next day, but failed to do so. Instead, he preferred to dwell on his hope that the show "will be bigger and better than previous years," claiming that the quality of exhibits had improved on last year. "I am happy to say that during our tour this morning, it was evident that this year, we will have one of the best exhibitions in recent years," he said.
Indications were that the bulk of the exhibitors would be parastatals and small and medium scale enterprises (SMEs). Banks and government ministries and agencies sponsored most SMEs at the ZITF. ZimTrade, the national export promotion agency, sponsored 17, while the Zimbabwe Allied Banking Group sponsored 20. A number of other banks are also sponsoring other SMEs from among their clients.
President Robert Mugabe was to officially open the ZITF after African leaders apparently snubbed the fair. Traditionally, a high-profile figure delivers the keynote address and presents prizes at the event. In 2006 Tanzania President Jakaya Kikwete performed the functions.
In recent years, local and foreign companies have largely shunned the ZITF, the largest trade showcase in the country, as the economic crisis worsens. Major exhibitors from USA, Europe and South Africa, once regular participants at the fair, have snubbed it again this year. Even Botswana, is for the first time since independence not part of the event this year.
Although Masuku did not disclose the exhibitors for this year's fair, it is believed that less than 400 may attend, down from about 650 last year. Only 18 foreign companies, especially from India, China and Indonesia are participating, with none coming from the West.
Zimbabwe Journalists
China-South Africa trade booms
South Africa's trade with China is booming. According to the trade and economics section of the Chinese embassy in Pretoria, it rose by 71.7 percent year on year to $1.92 billion for the first two months of 2007 alone.
Of this, Chinese exports to South Africa accounted for $1.02 billion, a 66 percent increase compared with the same period last year, despite the new quota limiting imports of Chinese clothing to protect South African industry. An increasing number of South African companies are doing business in China. Exports to China rose by 78.5 percent in the same two months to $900 billion.
Two-way tourism is also growing. SA Tourism targeted China three years ago as a growth market and has an office in Beijing. Spokesperson Monde Mateza said in late April that 41,962 visitors went to South Africa from Hong Kong and the Chinese mainland in 2006, with 3,886 in December alone.
But so far there are no direct flights between South Africa and the Chinese mainland. This will change at the end of April when China Eastern Airlines, one of the three largest in the country, will start a new service between Shanghai and Johannesburg, with a refuelling stop in the Maldives.
SAA considered flying either to Beijing or Shanghai but shelved this plan when it agreed to join the Star Alliance of international airlines, in favour of having its passengers carried by alliance partner Singapore Airlines. But although both these airlines have extensive routes, including important Chinese cities, most South Africans prefer to go to China more directly via Hong Kong, which is served by both SAA and Cathay Pacific Airlines with daily flights from Johannesburg. Sarah Uys, SAA's acting head of communications, said that it was now in discussions with China Eastern about possible co-operation.
Business Report
Of this, Chinese exports to South Africa accounted for $1.02 billion, a 66 percent increase compared with the same period last year, despite the new quota limiting imports of Chinese clothing to protect South African industry. An increasing number of South African companies are doing business in China. Exports to China rose by 78.5 percent in the same two months to $900 billion.
Two-way tourism is also growing. SA Tourism targeted China three years ago as a growth market and has an office in Beijing. Spokesperson Monde Mateza said in late April that 41,962 visitors went to South Africa from Hong Kong and the Chinese mainland in 2006, with 3,886 in December alone.
But so far there are no direct flights between South Africa and the Chinese mainland. This will change at the end of April when China Eastern Airlines, one of the three largest in the country, will start a new service between Shanghai and Johannesburg, with a refuelling stop in the Maldives.
SAA considered flying either to Beijing or Shanghai but shelved this plan when it agreed to join the Star Alliance of international airlines, in favour of having its passengers carried by alliance partner Singapore Airlines. But although both these airlines have extensive routes, including important Chinese cities, most South Africans prefer to go to China more directly via Hong Kong, which is served by both SAA and Cathay Pacific Airlines with daily flights from Johannesburg. Sarah Uys, SAA's acting head of communications, said that it was now in discussions with China Eastern about possible co-operation.
Business Report
Tanzania markets Dar port to landlocked neighbours
Tanzania Ports Authority (TPA) is going to embark on a mission to woo trade from the landlocked countries of Rwanda, Burundi, Uganda and Zambia to use Tanzania's Dar es Salaam port, according to reports.
One part of the campaign will be the introduction of an annual ports conference for transit transport organisations, trade operators and their global associates on ways of growing their businesses. TPA corporate communications manager Franklin Mziray said that the conference will, among other things, discuss global maritime trade trends and the port industry from a regional economic perspective.
The Tanzanian government decided to restart the tender for the contract to operate the general cargo terminal at Dar es Salaam to ease growing congestion. The TPA will hand over ownership of the terminal to the selected operator by June 2007. The government believes that greater efficiency at the port will enable it to challenge Mombasa as the leading port in East Africa.
Port World
One part of the campaign will be the introduction of an annual ports conference for transit transport organisations, trade operators and their global associates on ways of growing their businesses. TPA corporate communications manager Franklin Mziray said that the conference will, among other things, discuss global maritime trade trends and the port industry from a regional economic perspective.
The Tanzanian government decided to restart the tender for the contract to operate the general cargo terminal at Dar es Salaam to ease growing congestion. The TPA will hand over ownership of the terminal to the selected operator by June 2007. The government believes that greater efficiency at the port will enable it to challenge Mombasa as the leading port in East Africa.
Port World
New project to re-brand East African Community
A new project to re-brand the East African Community and make it more appealing to its 90-million plus population, will be launched in member states. It will involve a five-year marketing and publicity strategy that will incorporate all media organisations in Kenya, Uganda and Tanzania.
The organisation's secretary-general, Juma Mwapachu, said, "EAC needs a platform that is more robust in reaching out and galvanising East Africans around the policies and strategies it considers, formulates and implements and such a medium can best be provided by the media." An EAC Directorate of Corporate Communications and Public Affairs will be established to ensure the project succeeds. This follows lack of awareness and scepticism among the public on the integration.
Mwapachu said globalisation had debunked the mantra that small was beautiful adding that size mattered in current world politics. Citing developments in the European Union, he said the benefits of integration were enormous, as it had helped member countries transform themselves into economic powerhouses. "Some European countries which were backwaters in terms of development have since become vibrant and prosperous economies upon their becoming members of the EU," he said. The former Tanzanian Cabinet minister expressed concern that the media in region had not adequately sold advantages of integration.
Daily Nation
The organisation's secretary-general, Juma Mwapachu, said, "EAC needs a platform that is more robust in reaching out and galvanising East Africans around the policies and strategies it considers, formulates and implements and such a medium can best be provided by the media." An EAC Directorate of Corporate Communications and Public Affairs will be established to ensure the project succeeds. This follows lack of awareness and scepticism among the public on the integration.
Mwapachu said globalisation had debunked the mantra that small was beautiful adding that size mattered in current world politics. Citing developments in the European Union, he said the benefits of integration were enormous, as it had helped member countries transform themselves into economic powerhouses. "Some European countries which were backwaters in terms of development have since become vibrant and prosperous economies upon their becoming members of the EU," he said. The former Tanzanian Cabinet minister expressed concern that the media in region had not adequately sold advantages of integration.
Daily Nation
UN lifts embargo on Liberian diamonds
The UN Security Council on April 27 lifted its embargo on Liberia's diamond exports, saying the west African nation has made progress in certifying the origin of its rough diamonds. The 15-member Security Council unanimously approved a US-drafted resolution that canceled a 2003 resolution's embargo on Liberian raw diamonds.
It was the council's second vote of confidence in the new president of Liberia, Ellen Johnson Sirleaf, following the lifting in June 2006 of an embargo on Liberian wood. In the diamonds resolution, the council said it was "applauding the government of Liberia's continuing cooperation with the Kimberley Process Certification Scheme" and thus had decided "to terminate the measures on diamonds imposed by paragraph 6 of resolution 1521" in 2003, which was an embargo on raw diamonds.
The United Nations-backed Kimberley Process, which groups 43 countries and international organizations, was set up in May 2000 to prevent illegally exported "conflict diamonds" being used to buy arms. Members of the group have agreed to a certificate system designed to identify the origin of diamonds and guarantee that they are legally exported. Under the Kimberley Process, rough diamonds are sealed in tamper-resistant containers and required to have forgery-resistant, conflict-free certificates with unique serial numbers each time they cross an international border.
The Security Council said it would review its action in 90 days, based on an evaluation it will receive from the Kimberley Process on Liberia's performance. Liberia was left in ruins after 14 years of civil war. During the back-to-back civil wars in 1989-2003, rivals plundered the country's wood and diamond resources to finance weapons buying.
In December 2006, the Security Council renewed sanctions against Liberia barring trade in diamonds and arms as well as targeting individual Liberians. While the council then welcomed progress by the Liberian government since January 2006 to reconstruct the war-torn country and cooperate with the international effort to monitor the diamond trade, it said the situation still posed a threat to peace and security in the region.
Trafficking in illegal diamonds is considered one of the root causes of the civil war in Liberia, as well as of the 10-year brutal conflict in neighboring Sierra Leone that ended in 2001.
France 24
It was the council's second vote of confidence in the new president of Liberia, Ellen Johnson Sirleaf, following the lifting in June 2006 of an embargo on Liberian wood. In the diamonds resolution, the council said it was "applauding the government of Liberia's continuing cooperation with the Kimberley Process Certification Scheme" and thus had decided "to terminate the measures on diamonds imposed by paragraph 6 of resolution 1521" in 2003, which was an embargo on raw diamonds.
The United Nations-backed Kimberley Process, which groups 43 countries and international organizations, was set up in May 2000 to prevent illegally exported "conflict diamonds" being used to buy arms. Members of the group have agreed to a certificate system designed to identify the origin of diamonds and guarantee that they are legally exported. Under the Kimberley Process, rough diamonds are sealed in tamper-resistant containers and required to have forgery-resistant, conflict-free certificates with unique serial numbers each time they cross an international border.
The Security Council said it would review its action in 90 days, based on an evaluation it will receive from the Kimberley Process on Liberia's performance. Liberia was left in ruins after 14 years of civil war. During the back-to-back civil wars in 1989-2003, rivals plundered the country's wood and diamond resources to finance weapons buying.
In December 2006, the Security Council renewed sanctions against Liberia barring trade in diamonds and arms as well as targeting individual Liberians. While the council then welcomed progress by the Liberian government since January 2006 to reconstruct the war-torn country and cooperate with the international effort to monitor the diamond trade, it said the situation still posed a threat to peace and security in the region.
Trafficking in illegal diamonds is considered one of the root causes of the civil war in Liberia, as well as of the 10-year brutal conflict in neighboring Sierra Leone that ended in 2001.
France 24
Ethiopian separatists ambush Chinese-run oil field
Separatist rebels stormed a Chinese-run oil field in eastern Ethiopia on April 23, killing more than 70 people, including nine Chinese workers, in one of Ethiopia's worst rebel attacks in years. Dozens of gunmen crept up to the oil field at dawn and unleashed a barrage of machine-gun fire at Ethiopian soldiers posted outside, Chinese and Ethiopian officials said. After a fierce hour long battle, the rebels rushed away, taking at least six Chinese hostages with them. Ethiopia has been racked by separatist movements for years. But the severity of this attack seemed to unnerve Ethiopian officials, who usually minimize any threats to their control.
The Ogaden National Liberation Front, a militant group fighting for control of eastern Ethiopia, immediately claimed responsibility, circulating an e-mail message that said, "We will not allow the mineral resources of our people to be exploited by this regime or any firm that it enters into an illegal contract." The front said that its primary target was the Ethiopian soldiers guarding the oil field and that the Chinese workers had been killed by explosions during the fighting.
Given China's drive to extract oil wherever it can be found, Chinese workers are often dispatched to conflict zones, and several have been kidnapped in the volatile Niger Delta region of Nigeria. In other parts of Africa, like Zambia, China's investments have brought resentment from local politicians and residents.
In August 2006, the Web-savvy rebel front issued an electronic threat against a Malaysian oil company that was contemplating drilling in Ethiopia. The oil field that the rebels raided on April 23 was run by a division of China's government-owned energy giant, the China Petroleum and Chemical Corporation. According to Xinhua, the official Chinese news agency, the Ethiopian rebels briefly seized control of the oil field before kidnapping seven Chinese workers, who were among the 37 Chinese and 120 Ethiopians employed there.
NY Times
The Ogaden National Liberation Front, a militant group fighting for control of eastern Ethiopia, immediately claimed responsibility, circulating an e-mail message that said, "We will not allow the mineral resources of our people to be exploited by this regime or any firm that it enters into an illegal contract." The front said that its primary target was the Ethiopian soldiers guarding the oil field and that the Chinese workers had been killed by explosions during the fighting.
Given China's drive to extract oil wherever it can be found, Chinese workers are often dispatched to conflict zones, and several have been kidnapped in the volatile Niger Delta region of Nigeria. In other parts of Africa, like Zambia, China's investments have brought resentment from local politicians and residents.
In August 2006, the Web-savvy rebel front issued an electronic threat against a Malaysian oil company that was contemplating drilling in Ethiopia. The oil field that the rebels raided on April 23 was run by a division of China's government-owned energy giant, the China Petroleum and Chemical Corporation. According to Xinhua, the official Chinese news agency, the Ethiopian rebels briefly seized control of the oil field before kidnapping seven Chinese workers, who were among the 37 Chinese and 120 Ethiopians employed there.
NY Times
April 27, 2007
Mozambique's economic miracle
By Matthew Kaminki
In the Hulene quarter of Maputo, private minibuses swerve around holes carved in seas of mud. Metal sheets provide shelter for thousands packed in without electricity or sanitation. Illiteracy and HIV rates are shockingly high.
Mozambique is one of the world's poorest countries, but it is also an African success story. To the immediate west, Zimbabwe's Robert Mugabe misrules his country toward calamity. Nigeria, Ivory Coast and others are beset by civil conflict and corruption. But Mozambique, scarred by 16 years of civil war and Soviet-style economics, turned itself in the right direction on its own.
For all the debates over development strategies, the secret to Mozambique's recovery is simple. "We opened our markets and dropped the centralized economy," says Miquelina Menezes, who chairs the country's association of economists and runs a fund devoted to bringing electricity to rural areas. "If you want to join the world, you have to change. We needed to rebuild the country and to rebuild confidence."
The elite never experienced an ideological conversion. The main drags in Maputo, once dedicated to Portuguese worthies, are still named after Mao, Lenin and Kim Il Sung. ("It's our history, not our present," laughs Ms. Menezes. "They won't change them again.") But hyperinflation and a stagnant economy forced leaders of the neo-Marxist liberation movement,
Frelimo, to shift their approach. Starting in the early 1990s, the ruling party cut subsidies, opened to outside investment, privatized firms nationalized after independence in 1975 and got a grip on borrowing and the budget. An independent central bank brought inflation into single digits. According to the World Economic Forum's competitiveness index, Mozambique has reformed more than any sub-Saharan African country.
The payoff is the highest average growth rate, at 8% over the last decade, among the continent's non-oil exporters. GDP per capita is a still tiny $320, but that's compared with $178 in 1992. Since 1997, poverty rates decreased more in rural areas (from 71% to 55%) than in urban (62% to 52%), according to the World Bank. Child mortality has declined to 152 per 1,000 live births from 235. And primary-school enrollment has risen to 71% from 43%. Once a leading recipient of food aid, Mozambique now exports maize, with 5.6% average yearly growth in farming in the last 15 years. Banks, telecom and tourist firms, many from neighboring South Africa, have come in.
"Economic and political stability has been the key factor" to reviving the country, says Thiago Fonseca, who runs an advertising agency. His challenges : A lack of skilled workers and HIV/AIDS, which has claimed the lives of a couple of his employees. The nation's HIV prevalence rate is 16%, which will reduce life expectancy to age 36 by 2010, from 40 today.
Appreciating the change for the better takes some imagination. Like many of its neighbors, Mozambique went from colonialism under Portugal, still a developing country itself, to a Cold War-proxy conflict that claimed a million lives (out of 20 million) and left a generation uneducated. Few of the paved roads have been worked on since the Portuguese left 32 years ago. "A lot of the growth is catch-up after war," says the World Bank's man in Maputo, Michael Baxter.
But neighbors in similar straits haven't put in place Mozambique's fixes. Inflation in Zimbabwe is 2,200% (end of April 2007); nearby Malawi and Zambia, their economies distorted by subsidies on commodities, are growing haphazardly. "You need political will" to get it right, says Baxter. "Starting from a low base" or "being a former colony," oft-heard excuses for Africa, has little impact on economic performance. What matters, as regional dynamo Botswana also shows, is governance. A "donor darling," Mozambique doesn't obviously squander the more than $1 billion a year in Western aid, which accounts for half the budget. Experience here suggests that a commitment to economic opening ought to be the litmus test for aid recipients.
No country in this part of the world is assured of staying on track. Erratic "Uncle Bob," as his deferential neighbors call Zimbabwe's 83-year-old Robert Mugabe, is a useful reminder that local politicians pose the gravest threat to Africa's future. In each of the three general elections since the 1990 constitution, Frelimo has won by wider margins amid accusations of fraud. Absent any peaceful turnover of power in Mozambique, Frelimo and the state are increasingly becoming one; nearly all jobs are reserved for party members.
What if it lost elections? "We'd have a serious revolution," says Fernando Lima, publisher of Mediacoop, the largest independent press group. While the government is publicly committed to free speech and democracy - to keep donors happy, at least - Mozambique's civil society is hampered by state domination of media, low penetration of radio and television, and weak institutions such as the courts. "Every country in Africa says it's a multi-party democracy," says Leon Louw, director of the Law Review Project in Johannesburg. "It doesn't mean it's so; it only means it's better than it could be."
In the meantime, having done the so-called first generation of market reforms, the government is dragging its feet on legalizing land ownership, fighting corruption and loosening a restrictive labor code to bring in more investment. "Now they're stuck," says Lima. "There is a strong socialist background here. If we want to perform, we need to be different."
The road ahead for a place like Mozambique is staggeringly long. About 93% of its people lack access to electricity. Half can't read; half are undernourished. But Africa needs to start somewhere, and Mozambique shows how.
http://danieljharper.blogspot.com/2007/04/mozambique-miracle.html
In the Hulene quarter of Maputo, private minibuses swerve around holes carved in seas of mud. Metal sheets provide shelter for thousands packed in without electricity or sanitation. Illiteracy and HIV rates are shockingly high.
Mozambique is one of the world's poorest countries, but it is also an African success story. To the immediate west, Zimbabwe's Robert Mugabe misrules his country toward calamity. Nigeria, Ivory Coast and others are beset by civil conflict and corruption. But Mozambique, scarred by 16 years of civil war and Soviet-style economics, turned itself in the right direction on its own.
For all the debates over development strategies, the secret to Mozambique's recovery is simple. "We opened our markets and dropped the centralized economy," says Miquelina Menezes, who chairs the country's association of economists and runs a fund devoted to bringing electricity to rural areas. "If you want to join the world, you have to change. We needed to rebuild the country and to rebuild confidence."
The elite never experienced an ideological conversion. The main drags in Maputo, once dedicated to Portuguese worthies, are still named after Mao, Lenin and Kim Il Sung. ("It's our history, not our present," laughs Ms. Menezes. "They won't change them again.") But hyperinflation and a stagnant economy forced leaders of the neo-Marxist liberation movement,
Frelimo, to shift their approach. Starting in the early 1990s, the ruling party cut subsidies, opened to outside investment, privatized firms nationalized after independence in 1975 and got a grip on borrowing and the budget. An independent central bank brought inflation into single digits. According to the World Economic Forum's competitiveness index, Mozambique has reformed more than any sub-Saharan African country.
The payoff is the highest average growth rate, at 8% over the last decade, among the continent's non-oil exporters. GDP per capita is a still tiny $320, but that's compared with $178 in 1992. Since 1997, poverty rates decreased more in rural areas (from 71% to 55%) than in urban (62% to 52%), according to the World Bank. Child mortality has declined to 152 per 1,000 live births from 235. And primary-school enrollment has risen to 71% from 43%. Once a leading recipient of food aid, Mozambique now exports maize, with 5.6% average yearly growth in farming in the last 15 years. Banks, telecom and tourist firms, many from neighboring South Africa, have come in.
"Economic and political stability has been the key factor" to reviving the country, says Thiago Fonseca, who runs an advertising agency. His challenges : A lack of skilled workers and HIV/AIDS, which has claimed the lives of a couple of his employees. The nation's HIV prevalence rate is 16%, which will reduce life expectancy to age 36 by 2010, from 40 today.
Appreciating the change for the better takes some imagination. Like many of its neighbors, Mozambique went from colonialism under Portugal, still a developing country itself, to a Cold War-proxy conflict that claimed a million lives (out of 20 million) and left a generation uneducated. Few of the paved roads have been worked on since the Portuguese left 32 years ago. "A lot of the growth is catch-up after war," says the World Bank's man in Maputo, Michael Baxter.
But neighbors in similar straits haven't put in place Mozambique's fixes. Inflation in Zimbabwe is 2,200% (end of April 2007); nearby Malawi and Zambia, their economies distorted by subsidies on commodities, are growing haphazardly. "You need political will" to get it right, says Baxter. "Starting from a low base" or "being a former colony," oft-heard excuses for Africa, has little impact on economic performance. What matters, as regional dynamo Botswana also shows, is governance. A "donor darling," Mozambique doesn't obviously squander the more than $1 billion a year in Western aid, which accounts for half the budget. Experience here suggests that a commitment to economic opening ought to be the litmus test for aid recipients.
No country in this part of the world is assured of staying on track. Erratic "Uncle Bob," as his deferential neighbors call Zimbabwe's 83-year-old Robert Mugabe, is a useful reminder that local politicians pose the gravest threat to Africa's future. In each of the three general elections since the 1990 constitution, Frelimo has won by wider margins amid accusations of fraud. Absent any peaceful turnover of power in Mozambique, Frelimo and the state are increasingly becoming one; nearly all jobs are reserved for party members.
What if it lost elections? "We'd have a serious revolution," says Fernando Lima, publisher of Mediacoop, the largest independent press group. While the government is publicly committed to free speech and democracy - to keep donors happy, at least - Mozambique's civil society is hampered by state domination of media, low penetration of radio and television, and weak institutions such as the courts. "Every country in Africa says it's a multi-party democracy," says Leon Louw, director of the Law Review Project in Johannesburg. "It doesn't mean it's so; it only means it's better than it could be."
In the meantime, having done the so-called first generation of market reforms, the government is dragging its feet on legalizing land ownership, fighting corruption and loosening a restrictive labor code to bring in more investment. "Now they're stuck," says Lima. "There is a strong socialist background here. If we want to perform, we need to be different."
The road ahead for a place like Mozambique is staggeringly long. About 93% of its people lack access to electricity. Half can't read; half are undernourished. But Africa needs to start somewhere, and Mozambique shows how.
http://danieljharper.blogspot.com/2007/04/mozambique-miracle.html
April 16, 2007
India trying to catch up with China in Africa
India could start giving China a run for its money in Africa, if things go according to plan. If an Africa-China summit grabbed headlines all round the world and was a manifestation of an aggressive China wooing the African market, then India is in no mood to be left behind.
A joint working group of officials from several ministries is discussing modalities of hosting an Africa-India summit. The group held its first meeting in March and the second is likely to be held in May, sources said. A 17-member delegation, consisting of officials from the African Union, had come to Delhi to hold discussions with officials here, they said.
There has a lot of interest from the African side. In fact, African Union (AU) chairman Mr Alpha Oumar Konare, during a recent visit to India, had taken up the idea of such a summit with External Affairs Minister Pranab Mukherjee, who had agreed to the idea in principle.
However, the entire process is said to be at a very preliminary stage, with no timeframe for when the summit will be held yet. Discussions have largely centered on issues to be discussed at such a summit.
Earlier this year, over 40 African heads of state and ministers travelled to energy-hungry China for the summit that focused mainly on trade and investment. The summit ended with China promising to double aid and trade to Africa.
China’s top and senior leaders have travelled frequently to African countries even as Chinese companies tap into Africa’s abundant mineral resources. President Hu Jintao was on a 12-day tour of African countries including Cameroon, Zambia, Namibia and Sudan early this year, his second trip to Africa in less than a year.
Apart from South Africa, Prime Minister Manmohan Singh is yet to visit any African country. However, officials say that Africa has been on the agenda of the government and that the idea of a summit originated several years ago and has nothing to do with the China-Africa summit.
Officials say that the pattern of ties between India and Africa is different and that it is a relationship based on technical help and capacity building and not just assistance, whereas China’s labour policy and hunger for resources has generated bad press. For example, India has been offering scholarships for various studies for years while China started offering scholarships recently, said an official. Indian companies have also been entering the African market through the safer option of Lines of Credit.
But nevertheless, China is fast cornering the market. According to government figures, while bilateral trade between India and Africa stood at $9.14 billion in 2004-05, China-Africa bilateral trade was $42 billion.
Economic Times
A joint working group of officials from several ministries is discussing modalities of hosting an Africa-India summit. The group held its first meeting in March and the second is likely to be held in May, sources said. A 17-member delegation, consisting of officials from the African Union, had come to Delhi to hold discussions with officials here, they said.
There has a lot of interest from the African side. In fact, African Union (AU) chairman Mr Alpha Oumar Konare, during a recent visit to India, had taken up the idea of such a summit with External Affairs Minister Pranab Mukherjee, who had agreed to the idea in principle.
However, the entire process is said to be at a very preliminary stage, with no timeframe for when the summit will be held yet. Discussions have largely centered on issues to be discussed at such a summit.
Earlier this year, over 40 African heads of state and ministers travelled to energy-hungry China for the summit that focused mainly on trade and investment. The summit ended with China promising to double aid and trade to Africa.
China’s top and senior leaders have travelled frequently to African countries even as Chinese companies tap into Africa’s abundant mineral resources. President Hu Jintao was on a 12-day tour of African countries including Cameroon, Zambia, Namibia and Sudan early this year, his second trip to Africa in less than a year.
Apart from South Africa, Prime Minister Manmohan Singh is yet to visit any African country. However, officials say that Africa has been on the agenda of the government and that the idea of a summit originated several years ago and has nothing to do with the China-Africa summit.
Officials say that the pattern of ties between India and Africa is different and that it is a relationship based on technical help and capacity building and not just assistance, whereas China’s labour policy and hunger for resources has generated bad press. For example, India has been offering scholarships for various studies for years while China started offering scholarships recently, said an official. Indian companies have also been entering the African market through the safer option of Lines of Credit.
But nevertheless, China is fast cornering the market. According to government figures, while bilateral trade between India and Africa stood at $9.14 billion in 2004-05, China-Africa bilateral trade was $42 billion.
Economic Times
Drug giants accused of ignoring fake medicines that kill millions
The world's major drug companies have been accused of turning a blind eye to the multibillion-dollar trade in fake medicine that has resulted in an explosion of child malaria deaths in developing countries. Governments have not tackled the problem and pharmaceutical companies are burying the issue, afraid that any publicity given to their medicines being faked will lead to a fall in the sale of the genuine product, according to a documentary.
The problem has been particularly acute with the treatment of malaria in Africa, with anti-malaria drugs faked on an industrial scale. Professor Nick White, of Oxford University, one of the world's leading experts on malaria, said that counterfeit medicine was a major reason why malaria had become, over the past 30 years, Africa's biggest child killer, from an illness that used to be easily treated with medicines. Some of the fake drugs contain no medicine at all, but others have tiny traces of the real ingredients - which leads to another, potentially bigger problem : it allows the malaria parasite to build up resistance to the drug.
Nigeria's campaigning drugs regulator, Dora Akunyili, described counterfeiting as "mass murder". She said,"The fake drug racket and the silence associated with it have led to the resurgence of malaria... The companies kept quiet. The regulators were paid off and everybody was helpless. Drug counterfeiters operated in this country and in most developing countries for almost three decades, unchallenged."
There is now just one family of drugs left that malaria has not built up resistance to, Artemisinins - which are also being faked. Professor White said : "Resistance to the Artemisinins would be an absolute catastrophe for our current attempts to try to control malaria."
It is estimated that the global fake drug racket is worth $40 billion a year, and between 50 and 90 per cent of medicine in some African and Asian countries is counterfeit. Graham Satchwell, the former head of security at GlaxoSmithKline, the global pharmaceutical giant, said, "Each therapy area is highly competitive, so if one person's drug is undermined, their market share will suffer. It takes a brave company to say they have a problem."
Satchwell said that the "majority of the industry are sitting on their hands", rather than tackling the problem - for instance through radio tracking of their products. He also pointed out that the figures from the industry's own organisation, the Pharmaceutical Security Institute, showed many cases of counterfeiting in the US, but hardly any in China or Africa - despite firm evidence from other sources that tens of thousands die each year in China and Africa as a result of fake medicines each year.
Dr. Akunyili said: "If the companies had risen up to their responsibilities early enough, the issue of the preponderance of fake drugs would not have gotten to the level it got in Nigeria. It is this silence that is actually largely encouraging drug counterfeiting."
Dr. Martin Meremikwu, of Calabar University Hospital, in southern Nigeria, said that he had seen child malaria deaths soar. He said that, by the time children who had been treated with fake drugs got to the hospitals, it was often too late to save them. "Malaria should not kill people. It's a curable disease. But if the patient uses the wrong drug, either because they are fake or they are ineffective because of higher resistance , then they are lying here with complications.
"And in children, young children, the time between a mild disease and a severe disease can be as little as eight hours, or 24 hours or 12 hours. So time is of the huge essence here. You really cannot afford to try some other drug before trying a good one because you don't have that time."
* Counterfeit medicines are swamping unregulated markets in developing nations. Counterfeit drugs occasionally contain small doses of the active ingredient - enough to induce resistance.
* The UN World Health Organisation estimates the incidence of counterfeit medicines is about 10 per cent in developing countries, with prevalence higher where regulatory control is weakest. But in many parts of Africa, according to the WHO, as well as in some countries in Latin America and South Asia, prevalence sits at around 30 per cent. The patients hit are the sickest and the poorest.
* WHO estimates that 200,000 of the one million malaria deaths every year would be prevented if all the drugs taken were genuine. In Cambodia, Tanzania and Cameroon, up to 90
per cent of such drugs on sale in local markets are believed to contain nothing but chalk or maize flour.
* As recently as 2001, about 68 per cent of medicines in circulation in Nigeria were unregistered, and as much as 41 per cent were believed to be fake.
The Independent
The problem has been particularly acute with the treatment of malaria in Africa, with anti-malaria drugs faked on an industrial scale. Professor Nick White, of Oxford University, one of the world's leading experts on malaria, said that counterfeit medicine was a major reason why malaria had become, over the past 30 years, Africa's biggest child killer, from an illness that used to be easily treated with medicines. Some of the fake drugs contain no medicine at all, but others have tiny traces of the real ingredients - which leads to another, potentially bigger problem : it allows the malaria parasite to build up resistance to the drug.
Nigeria's campaigning drugs regulator, Dora Akunyili, described counterfeiting as "mass murder". She said,"The fake drug racket and the silence associated with it have led to the resurgence of malaria... The companies kept quiet. The regulators were paid off and everybody was helpless. Drug counterfeiters operated in this country and in most developing countries for almost three decades, unchallenged."
There is now just one family of drugs left that malaria has not built up resistance to, Artemisinins - which are also being faked. Professor White said : "Resistance to the Artemisinins would be an absolute catastrophe for our current attempts to try to control malaria."
It is estimated that the global fake drug racket is worth $40 billion a year, and between 50 and 90 per cent of medicine in some African and Asian countries is counterfeit. Graham Satchwell, the former head of security at GlaxoSmithKline, the global pharmaceutical giant, said, "Each therapy area is highly competitive, so if one person's drug is undermined, their market share will suffer. It takes a brave company to say they have a problem."
Satchwell said that the "majority of the industry are sitting on their hands", rather than tackling the problem - for instance through radio tracking of their products. He also pointed out that the figures from the industry's own organisation, the Pharmaceutical Security Institute, showed many cases of counterfeiting in the US, but hardly any in China or Africa - despite firm evidence from other sources that tens of thousands die each year in China and Africa as a result of fake medicines each year.
Dr. Akunyili said: "If the companies had risen up to their responsibilities early enough, the issue of the preponderance of fake drugs would not have gotten to the level it got in Nigeria. It is this silence that is actually largely encouraging drug counterfeiting."
Dr. Martin Meremikwu, of Calabar University Hospital, in southern Nigeria, said that he had seen child malaria deaths soar. He said that, by the time children who had been treated with fake drugs got to the hospitals, it was often too late to save them. "Malaria should not kill people. It's a curable disease. But if the patient uses the wrong drug, either because they are fake or they are ineffective because of higher resistance , then they are lying here with complications.
"And in children, young children, the time between a mild disease and a severe disease can be as little as eight hours, or 24 hours or 12 hours. So time is of the huge essence here. You really cannot afford to try some other drug before trying a good one because you don't have that time."
* Counterfeit medicines are swamping unregulated markets in developing nations. Counterfeit drugs occasionally contain small doses of the active ingredient - enough to induce resistance.
* The UN World Health Organisation estimates the incidence of counterfeit medicines is about 10 per cent in developing countries, with prevalence higher where regulatory control is weakest. But in many parts of Africa, according to the WHO, as well as in some countries in Latin America and South Asia, prevalence sits at around 30 per cent. The patients hit are the sickest and the poorest.
* WHO estimates that 200,000 of the one million malaria deaths every year would be prevented if all the drugs taken were genuine. In Cambodia, Tanzania and Cameroon, up to 90
per cent of such drugs on sale in local markets are believed to contain nothing but chalk or maize flour.
* As recently as 2001, about 68 per cent of medicines in circulation in Nigeria were unregistered, and as much as 41 per cent were believed to be fake.
The Independent
Wolofowitz seeks Africa's help to save his job over favouritism allegations
World Bank president Paul D. Wolfowitz, seeking support for his beleaguered leadership, is turning for help to the one group at the bank that aides say he has focused on the most, the leaders of sub-Saharan Africa, bank officials say.
Several finance ministers of African countries said he had done an outstanding job in increasing aid to Africa and demanding an end to corruption.
"He has been a visionary," said Antoinette Sayeh, finance minister of Liberia, which has received considerable bank assistance following its conflicts of a couple years ago. "We're very grateful for his leadership in getting where we are today. We look forward to that continuing."
Rama Sithanen, a deputy prime minister of Mauritius, said Wolfowitz had been "supportive of the reforms in our country." He said Wolfowitz "has apologized for what has happened" regarding the favouritism shown to his companion, Shaha Ali Riza, who is employed at the bank. At issue is Wolfowitz's handling of the transfer, promotion and raise of Riza at the bank when he arrived in 2005. She was detailed to the State Department and given a raise of nearly 50 percent in a manner that the bank's staff association said violated bank rules. The association has called for him to resign.
Bank officials critical of Wolfowitz acknowledge that he has concentrated considerable energy on Africa and received praise from African leaders, but they also accuse him of cynically trying to rally Africans dependent on his good will in recent weeks, as criticism of his leadership has mounted. Several bank officials, asking not to be identified in order to avoid reprisals, charged that Wolfowitz was seeking backing from Africa as a kind of political base to counter the growing resentment among European leaders over his policies, particularly his anti-corruption campaign.
Wolfowitz met on April 13 with the African members of the bank's board of governors, an aide said, adding that as bank president he has met virtually every day with at least someone involved in African development. Wolfowitz was instrumental in pushing for a huge debt cancellation plan for poor countries, most of them in Africa, announced by President Bush, Prime Minister Tony Blair of Britain and other Western leaders at a 2005 summit meeting in Gleneagles, Scotland, attended by the singer Bono and other celebrities.
Although he has also imposed temporary aid cutoffs to Africa on grounds of corruption, angering European aid officials who felt they were not consulted, he has also won friends among many African countries for preaching accountability in government. At a meeting on Thursday at which he was booed by bank employees, Wolfowitz appealed to the hostile crowd to work with him on the bank's real priorities, singling out Africa.
NYTimes
Several finance ministers of African countries said he had done an outstanding job in increasing aid to Africa and demanding an end to corruption.
"He has been a visionary," said Antoinette Sayeh, finance minister of Liberia, which has received considerable bank assistance following its conflicts of a couple years ago. "We're very grateful for his leadership in getting where we are today. We look forward to that continuing."
Rama Sithanen, a deputy prime minister of Mauritius, said Wolfowitz had been "supportive of the reforms in our country." He said Wolfowitz "has apologized for what has happened" regarding the favouritism shown to his companion, Shaha Ali Riza, who is employed at the bank. At issue is Wolfowitz's handling of the transfer, promotion and raise of Riza at the bank when he arrived in 2005. She was detailed to the State Department and given a raise of nearly 50 percent in a manner that the bank's staff association said violated bank rules. The association has called for him to resign.
Bank officials critical of Wolfowitz acknowledge that he has concentrated considerable energy on Africa and received praise from African leaders, but they also accuse him of cynically trying to rally Africans dependent on his good will in recent weeks, as criticism of his leadership has mounted. Several bank officials, asking not to be identified in order to avoid reprisals, charged that Wolfowitz was seeking backing from Africa as a kind of political base to counter the growing resentment among European leaders over his policies, particularly his anti-corruption campaign.
Wolfowitz met on April 13 with the African members of the bank's board of governors, an aide said, adding that as bank president he has met virtually every day with at least someone involved in African development. Wolfowitz was instrumental in pushing for a huge debt cancellation plan for poor countries, most of them in Africa, announced by President Bush, Prime Minister Tony Blair of Britain and other Western leaders at a 2005 summit meeting in Gleneagles, Scotland, attended by the singer Bono and other celebrities.
Although he has also imposed temporary aid cutoffs to Africa on grounds of corruption, angering European aid officials who felt they were not consulted, he has also won friends among many African countries for preaching accountability in government. At a meeting on Thursday at which he was booed by bank employees, Wolfowitz appealed to the hostile crowd to work with him on the bank's real priorities, singling out Africa.
NYTimes
South Africa, Sweden seek to build economic ties
A formal agreement to promote trade and investment between Sweden and South Africa has been signed. The initiative will see the broadening of economic cooperation between the two countries. Sweden has expressed an interest in assisting in trade capacity-building in South Africa.
Rob Davies, South Africa's deputy minister for trade, noted that between 2004 and 2005, trade between the countries increased by 21%, and by 37% between 2005 and 2006, although from a low base. He said Sweden is ranked twenty-sixth as a destination for exports, and eighteenth as a source of imports. Davies added that Swedish investment in South Africa accounts for some R1-billion ($140 million).
Officials said that one of the primary functions of the agreement is to make South African businesses more aware of opportunities that exist in Sweden. According to figures mentioned by Davies, 41% of Sweden’s imports from South Africa are base metals, while the majority of its exports to South Africa are value-added products.
Engineering News
Rob Davies, South Africa's deputy minister for trade, noted that between 2004 and 2005, trade between the countries increased by 21%, and by 37% between 2005 and 2006, although from a low base. He said Sweden is ranked twenty-sixth as a destination for exports, and eighteenth as a source of imports. Davies added that Swedish investment in South Africa accounts for some R1-billion ($140 million).
Officials said that one of the primary functions of the agreement is to make South African businesses more aware of opportunities that exist in Sweden. According to figures mentioned by Davies, 41% of Sweden’s imports from South Africa are base metals, while the majority of its exports to South Africa are value-added products.
Engineering News
COMESA to ease cross-border trade
The Common Market for Eastern and Southern Africa (COMESA) has worked out a mechanism that will ease the free movement of goods for cross border traders, its Secretary General, Erastus Mwencha, disclosed in Zambia in April. He said cross border traders with goods valued at less than 500 USD would not be required to produce certificates of origin for their clearance at border posts in the sub-region.
The provision would work well as long as Customs officers at check points are able to identify goods brought across borders from COMESA member countries. He added that it was also a cost for some traders that conduct their business along the borders to move around offices to obtain certificates of origin. However, member countries are also working on a mechanism to remove requirements such as visas. He pointed out that such a move would require the region to compile a database for all traders to ensure that only genuine traders benefit from the service.
The Cross-border Traders Association (CBTA) in Zambia complained that the non-implementation of trade protocols among COMESA and the Southern Africa Development Community (SADC) countries was affecting their trade.
CBTA Acting Chairperson Celeste Mwanakisi traders were still facing problems with Customs authorities in some COMESA member countries that had joined the Free Trade Area (FTA).
Indian Muslims
The provision would work well as long as Customs officers at check points are able to identify goods brought across borders from COMESA member countries. He added that it was also a cost for some traders that conduct their business along the borders to move around offices to obtain certificates of origin. However, member countries are also working on a mechanism to remove requirements such as visas. He pointed out that such a move would require the region to compile a database for all traders to ensure that only genuine traders benefit from the service.
The Cross-border Traders Association (CBTA) in Zambia complained that the non-implementation of trade protocols among COMESA and the Southern Africa Development Community (SADC) countries was affecting their trade.
CBTA Acting Chairperson Celeste Mwanakisi traders were still facing problems with Customs authorities in some COMESA member countries that had joined the Free Trade Area (FTA).
Indian Muslims
South Africa, Tanzania pledge to increase trade
Tanzania's president Jakaya Kikwete and South African president Thabo Mbeki held a meeting in Dar es Salaam on April 5 for enhanced economic ties and to narrow trade imbalance between their two countries. Trade volume reached 696.3 million US dollars in 2005, up from 314.9 million US dollars two years earlier, Kikwete said.
The two countries were arch-enemies during apartheid with officially zero trade between them. Tanzania's exports to South Africa rose to $292 million in 2005, from $38 million in 2003. Imports from South Africa swelled to $404 million in 2005, up from $277 million in 2003.
"We (Tanzania) are indeed having a trade deficit, but this is manageable provided that the country strives to fix supply side constraints," Kikwete explained. For example, he said, there was a cement order recently from a South African customer, but suppliers in Tanzania could hardly meet a quarter of the demand.
"South Africa is the fifth biggest foreign investor in Tanzania, after the United Kingdom, Kenya, India and China. It is my hope more investment will be pumped in as Tanzania continues to improve the investment climate," Kikwete said. He said that between 1990 and 2006, investment flows from South Africa reached $467 million, which accounted for 10 per cent of total external investments in the country during that period. He said there were 150 South African firms currently operating in Tanzania, including subsidiaries of world-class corporations like Anglo-Gold Ashanti, SAB Miller, AFGEM and Absa.
Daily News
The two countries were arch-enemies during apartheid with officially zero trade between them. Tanzania's exports to South Africa rose to $292 million in 2005, from $38 million in 2003. Imports from South Africa swelled to $404 million in 2005, up from $277 million in 2003.
"We (Tanzania) are indeed having a trade deficit, but this is manageable provided that the country strives to fix supply side constraints," Kikwete explained. For example, he said, there was a cement order recently from a South African customer, but suppliers in Tanzania could hardly meet a quarter of the demand.
"South Africa is the fifth biggest foreign investor in Tanzania, after the United Kingdom, Kenya, India and China. It is my hope more investment will be pumped in as Tanzania continues to improve the investment climate," Kikwete said. He said that between 1990 and 2006, investment flows from South Africa reached $467 million, which accounted for 10 per cent of total external investments in the country during that period. He said there were 150 South African firms currently operating in Tanzania, including subsidiaries of world-class corporations like Anglo-Gold Ashanti, SAB Miller, AFGEM and Absa.
Daily News
April 13, 2007
Middle East money pours into Africa; ruffles IMF, World Bank
by Mark Sorbara*
Billions of dollars are flowing from the Arab world to Africa, posing a challenge to the International Monetary Fund and other Paris-based lenders.
African flower exporters should pay attention to the Dubai Flower Centre (DFC). When fully operational this 34,000 square metre temperature-controlled facility will have the capacity to hold 180,000 tonnes of flowers. Dubai's ruler, Sheikh Mohammed bin Rashid Al Maktoum, is rapidly transforming his country from an oil-dependent Emirate to a centre for international trade, finance and investment. Seventy five per cent of all air freight out of Africa goes to Europe and horticulture is a major component of that trade, Maktoum hopes organisations like the DFC will attract some of that trade, making Dubai an international horticulture trading hub for Africa's flower exporters.That trade is expected to grow by over seven per cent annually.
Beyond the booming consumer goods, used car and electronic goods trade, Dubai is quickly becoming a destination of first choice for African gold, diamond and tea traders. Dubai does not produce gold but recorded imports of 489 tonnes and exports of 274 tonnes in 2006. South Africa is one of Dubai's top eight trading partners in the sector.
Although Dubai does not produce any diamonds, total trade in the sector increased over 46 per cent between 2004 and 2005, to $3.73 billion from $2.55 billion. In 2006 the value of Dubai's diamond trade reached $3.93 billion. The growth in Dubai's gold and diamond trade is a result of the 2002 creation of the Dubai Multi Commodity Centre (DMCC), which is a free zone that allows 100 per cent foreign ownership of companies, freehold ownership of real estate, a 50-year corporate and personal renewable tax holiday and easy access to "one-stop-shop" immigration and licensing services.
The DMCC also houses the Dubai Tea Trading Centre (DTTC) which began operations in 2005 to take advantage of the rapidly growing tea trade in a region which accounts for 25 per cent of global tea imports. Between January and October of 2005, 77.4 million kilos of multi-origin tea was cleared and re-exported through Dubai. African Countries such as Kenya, Ethiopia and Uganda regularly carry out transactions through the DTTC.
Dubai's location makes it an ideal trans-shipment point between Africa, Asia and Europe. Africa's foreign trade patterns will rapidly change as Dubai, one of the seven Emirates that make up the United Arab Emirates (UAE), tries to reduce dependence on oil and become an international trading centre, but the UAE as a whole is making a direct impact on the ground throughout Africa as well.
In real estate and telecommunications, UAE based companies are quickly becoming a competitive force in the African foreign direct investment (FDI) market. A consortium led by Istithmar, an investment company controlled by the Government of Dubai, bought Cape Town's V&A waterfront. The $100 million deal was completed in 2006 and is South Africa's largest property transaction to date.
The African telecommunications sector is also attracting investors from Dubai. Mubadala Development Company was the most recent winner of a licence under the Nigerian Communications Commission new unified licence regime. The $400 million investment will give Mubadala a stake in the rapidly growing Nigerian telecommunications sector. Al-Warid, another Dubai based communications firm was recently issued an operating licence in Uganda, which will enable the company to offer a similar broad range of services.
UAE based Etisalat, has a 20 per cent stake in the East African Marine System, a fibre optic cable which will connect East Africa to Fujairah in the UAE, which will offer stiff competition to the controversial East African Submarine Cable System. Beyond its equity stake, Etisalat will also be involved in the actual construction of the cable which will greatly reduce the cost of bandwidth access throughout East Africa.
Dubai is not the only new Middle Eastern player in Africa. From Kuwaiti-based Mobile Telecommunications Company's $3.4 billion purchase of Celtel, Africa largest mobile operator, to Qatar based Noor Petroleum's $2 billion Memorandum of Understanding to construct an oil refinery and pipeline in Tanzania, Middle Eastern investors are actively trying to make their mark outside of their traditional North African backyard.
Behind their European and American counterparts, and not as aggressive as the emerging giants, China, India and Brazil, Gulf States beyond the UAE such as Kuwait and Saudi Arabia are leading a significant investment drive into Africa as they search for alternative markets to bank their billions.
Kuwaiti firms have been on the move in the property, telecommunications and resource sectors. IFA Hotels and Resorts, a Kuwait based developer is listed on the Johannesburg Stock Exchange and has purchased several South African luxury resort over the past few years.
Mobile Telecommunications Company (MTC) is the largest Kuwaiti firm operating in Africa. After its $3.4 billion purchase of Celtel, it announced that it will invest over $1.4 billion in its operations in Nigeria. The new plan will bring the total investment by MTC in Nigeria, since its purchase of a controlling 65 per cent stake in V-mobile, to over $2.5 billion.
Kuwaiti firms are trying to take advantage of the continent's increasingly crowded and very competitive resource sector as well. Kuwaiti businessmen have talked about investing in Uganda's young oil and gas sector. And in 2006 Aref Investment Company acquired a 51 per cent stake the Sudanese oil services company Higleig Petroleum Services and the Kuwaiti Foreign Exploration Company paid $128 million for BG Group's interest in oil and gas properties in Mauritania as well.
In 2005 Saudi Arabia's Prince Al-waleed bin Talal, one of the richest individuals in the world, partnered with HSBC bank to form HSBC Kingdom African Investments, in which Al-waleed and HSBC will each contribute $200 million to invest in Africa. Recently Kingdom Holdings also began construction on a $60 million luxury hotel in Uganda.
Al-waleed was also involved in one of the largest foreign takeovers in Kenyan history. In 2005 Lonhro Plc sold five hotel properties to Kingdom Holdings in a deal worth over £17 million. Included in the deal were Lonhro's 100 per cent stake in the Norfolk Hotel and Mara Safari Club and its majority stakes in the Mount Kenya Safari Club, the Aberdare and the Ark. In 2005 Kingdom Holdings also purchased a 96 per cent interest in the 251-room Movenpick Royal Palm Hotel in Dar es Salaam. It also owns the Ghion, the oldest hotel in Addis Ababa, and is looking to expand its holdings throughout East Africa.
Like any savvy investor, Middle Eastern countries and businesses understand that it is not just about making money, but good business is also about giving money away. In 2006 Saudi Arabia donated $10 million to the West Africa operations of the World Food Programme which is to be shared between Ghana, Guinea Bissau, Liberia, Mali, Mauritania, Niger, Senegal and Sierra Leone. It also recently announced that it will construct a university in Kenya's Coast Province and fast track the construction of the Garissa-Modogashe-Wajir road.
Kuwait channels most of its bilateral assistance to African countries through the Kuwait Fund for Arab Economic Development. From loans to technical assistance, to infrastructure development, and agricultural assistance, since inception in 1961 the Fund has completed 75 projects, presently has 27 active projects and 6 in the pipeline, throughout East, Central and Southern Africa. In West Africa it has completed 68 projects, has 52 still active and 10 in the pipeline. Most other Middle Eastern States use regional multi-lateral institutions such as the Islamic Development Bank (IDB), the Arab Bank for Economic Development in Africa (ABEDA) and the OPEC Fund for International Development.
In November 2006 the IDB, based in Saudi Arabia, announced that it will raise $10 billion over the next 10 years to combat poverty in Africa. Saudi Arabia has committed $1 billion and Kuwait has pledged $300 million to the new fund. ABEDA, which is linked to the Arab league and headquartered in Khartoum, has budgeted $900 million over a five-year period ending in 2009 for assistance to African Countries.
In 2005, 43 countries benefited from ABEDA technical assistance and 41 countries benefited from its project loans. Between its creation in 1975 to 2005, ABEDA distributed over $2 billion to African countries; with Ghana, Guinea, Mali, Mozambique and Senegal each receiving over $100 million.
In 2006 the OPEC Fund distributed over $180 million in research grants, loans, public sector project support, debt relief and technical assistance to 18 SSA countries. The OPEC Fund which is made up of voluntary contributions from OPEC member states, has distributed over $8.5 billion since its inception in 1976 and by the end of 2006 had pledges of over $3.4 billion.
From a development practitioners point of view, you would think such increases in funding from alternative sources should be a positive. But in a November 2006 report, the IMF and World Bank questioned the large increase in non-Paris Club creditors in Africa such as China, Brazil, India, Korea, Kuwait and Saudi Arabia.
Saudi Arabia and Kuwait have become key emerging creditors in Mauritania, Eritrea, The Comoros, Sudan and Guinea-Bissau. As the report states with regard to these new creditors in Africa : "Many have non-traditional financial structures that hamper the assessment of their impact on debt sustainability," said the Bretton Woods institutions. Such debates are likely to increase as the Middle East becomes a more avid player in SSA in the near future.
Angola made international headlines when it became the 12th full member of the Organization of Petroleum Exporting Countries (OPEC) in 2006, but it is increasingly clear that Africa-Middle East relations are set to move significantly beyond just oil.
Amre Moussa is a former Egyptian Minister of Foreign Affairs and current Secretary-General of the Arab League wrote in African Analyst Quarterly. he says, "All these factors point to Africa's increasing importance on the global stage and the time has never been better for our two regions to develop a formidable strategic alliance in which we aid each other, rather than compete."
*Mr. Sorbara is a commentator on African international relations
The Daily Nation
Billions of dollars are flowing from the Arab world to Africa, posing a challenge to the International Monetary Fund and other Paris-based lenders.
African flower exporters should pay attention to the Dubai Flower Centre (DFC). When fully operational this 34,000 square metre temperature-controlled facility will have the capacity to hold 180,000 tonnes of flowers. Dubai's ruler, Sheikh Mohammed bin Rashid Al Maktoum, is rapidly transforming his country from an oil-dependent Emirate to a centre for international trade, finance and investment. Seventy five per cent of all air freight out of Africa goes to Europe and horticulture is a major component of that trade, Maktoum hopes organisations like the DFC will attract some of that trade, making Dubai an international horticulture trading hub for Africa's flower exporters.That trade is expected to grow by over seven per cent annually.
Beyond the booming consumer goods, used car and electronic goods trade, Dubai is quickly becoming a destination of first choice for African gold, diamond and tea traders. Dubai does not produce gold but recorded imports of 489 tonnes and exports of 274 tonnes in 2006. South Africa is one of Dubai's top eight trading partners in the sector.
Although Dubai does not produce any diamonds, total trade in the sector increased over 46 per cent between 2004 and 2005, to $3.73 billion from $2.55 billion. In 2006 the value of Dubai's diamond trade reached $3.93 billion. The growth in Dubai's gold and diamond trade is a result of the 2002 creation of the Dubai Multi Commodity Centre (DMCC), which is a free zone that allows 100 per cent foreign ownership of companies, freehold ownership of real estate, a 50-year corporate and personal renewable tax holiday and easy access to "one-stop-shop" immigration and licensing services.
The DMCC also houses the Dubai Tea Trading Centre (DTTC) which began operations in 2005 to take advantage of the rapidly growing tea trade in a region which accounts for 25 per cent of global tea imports. Between January and October of 2005, 77.4 million kilos of multi-origin tea was cleared and re-exported through Dubai. African Countries such as Kenya, Ethiopia and Uganda regularly carry out transactions through the DTTC.
Dubai's location makes it an ideal trans-shipment point between Africa, Asia and Europe. Africa's foreign trade patterns will rapidly change as Dubai, one of the seven Emirates that make up the United Arab Emirates (UAE), tries to reduce dependence on oil and become an international trading centre, but the UAE as a whole is making a direct impact on the ground throughout Africa as well.
In real estate and telecommunications, UAE based companies are quickly becoming a competitive force in the African foreign direct investment (FDI) market. A consortium led by Istithmar, an investment company controlled by the Government of Dubai, bought Cape Town's V&A waterfront. The $100 million deal was completed in 2006 and is South Africa's largest property transaction to date.
The African telecommunications sector is also attracting investors from Dubai. Mubadala Development Company was the most recent winner of a licence under the Nigerian Communications Commission new unified licence regime. The $400 million investment will give Mubadala a stake in the rapidly growing Nigerian telecommunications sector. Al-Warid, another Dubai based communications firm was recently issued an operating licence in Uganda, which will enable the company to offer a similar broad range of services.
UAE based Etisalat, has a 20 per cent stake in the East African Marine System, a fibre optic cable which will connect East Africa to Fujairah in the UAE, which will offer stiff competition to the controversial East African Submarine Cable System. Beyond its equity stake, Etisalat will also be involved in the actual construction of the cable which will greatly reduce the cost of bandwidth access throughout East Africa.
Dubai is not the only new Middle Eastern player in Africa. From Kuwaiti-based Mobile Telecommunications Company's $3.4 billion purchase of Celtel, Africa largest mobile operator, to Qatar based Noor Petroleum's $2 billion Memorandum of Understanding to construct an oil refinery and pipeline in Tanzania, Middle Eastern investors are actively trying to make their mark outside of their traditional North African backyard.
Behind their European and American counterparts, and not as aggressive as the emerging giants, China, India and Brazil, Gulf States beyond the UAE such as Kuwait and Saudi Arabia are leading a significant investment drive into Africa as they search for alternative markets to bank their billions.
Kuwaiti firms have been on the move in the property, telecommunications and resource sectors. IFA Hotels and Resorts, a Kuwait based developer is listed on the Johannesburg Stock Exchange and has purchased several South African luxury resort over the past few years.
Mobile Telecommunications Company (MTC) is the largest Kuwaiti firm operating in Africa. After its $3.4 billion purchase of Celtel, it announced that it will invest over $1.4 billion in its operations in Nigeria. The new plan will bring the total investment by MTC in Nigeria, since its purchase of a controlling 65 per cent stake in V-mobile, to over $2.5 billion.
Kuwaiti firms are trying to take advantage of the continent's increasingly crowded and very competitive resource sector as well. Kuwaiti businessmen have talked about investing in Uganda's young oil and gas sector. And in 2006 Aref Investment Company acquired a 51 per cent stake the Sudanese oil services company Higleig Petroleum Services and the Kuwaiti Foreign Exploration Company paid $128 million for BG Group's interest in oil and gas properties in Mauritania as well.
In 2005 Saudi Arabia's Prince Al-waleed bin Talal, one of the richest individuals in the world, partnered with HSBC bank to form HSBC Kingdom African Investments, in which Al-waleed and HSBC will each contribute $200 million to invest in Africa. Recently Kingdom Holdings also began construction on a $60 million luxury hotel in Uganda.
Al-waleed was also involved in one of the largest foreign takeovers in Kenyan history. In 2005 Lonhro Plc sold five hotel properties to Kingdom Holdings in a deal worth over £17 million. Included in the deal were Lonhro's 100 per cent stake in the Norfolk Hotel and Mara Safari Club and its majority stakes in the Mount Kenya Safari Club, the Aberdare and the Ark. In 2005 Kingdom Holdings also purchased a 96 per cent interest in the 251-room Movenpick Royal Palm Hotel in Dar es Salaam. It also owns the Ghion, the oldest hotel in Addis Ababa, and is looking to expand its holdings throughout East Africa.
Like any savvy investor, Middle Eastern countries and businesses understand that it is not just about making money, but good business is also about giving money away. In 2006 Saudi Arabia donated $10 million to the West Africa operations of the World Food Programme which is to be shared between Ghana, Guinea Bissau, Liberia, Mali, Mauritania, Niger, Senegal and Sierra Leone. It also recently announced that it will construct a university in Kenya's Coast Province and fast track the construction of the Garissa-Modogashe-Wajir road.
Kuwait channels most of its bilateral assistance to African countries through the Kuwait Fund for Arab Economic Development. From loans to technical assistance, to infrastructure development, and agricultural assistance, since inception in 1961 the Fund has completed 75 projects, presently has 27 active projects and 6 in the pipeline, throughout East, Central and Southern Africa. In West Africa it has completed 68 projects, has 52 still active and 10 in the pipeline. Most other Middle Eastern States use regional multi-lateral institutions such as the Islamic Development Bank (IDB), the Arab Bank for Economic Development in Africa (ABEDA) and the OPEC Fund for International Development.
In November 2006 the IDB, based in Saudi Arabia, announced that it will raise $10 billion over the next 10 years to combat poverty in Africa. Saudi Arabia has committed $1 billion and Kuwait has pledged $300 million to the new fund. ABEDA, which is linked to the Arab league and headquartered in Khartoum, has budgeted $900 million over a five-year period ending in 2009 for assistance to African Countries.
In 2005, 43 countries benefited from ABEDA technical assistance and 41 countries benefited from its project loans. Between its creation in 1975 to 2005, ABEDA distributed over $2 billion to African countries; with Ghana, Guinea, Mali, Mozambique and Senegal each receiving over $100 million.
In 2006 the OPEC Fund distributed over $180 million in research grants, loans, public sector project support, debt relief and technical assistance to 18 SSA countries. The OPEC Fund which is made up of voluntary contributions from OPEC member states, has distributed over $8.5 billion since its inception in 1976 and by the end of 2006 had pledges of over $3.4 billion.
From a development practitioners point of view, you would think such increases in funding from alternative sources should be a positive. But in a November 2006 report, the IMF and World Bank questioned the large increase in non-Paris Club creditors in Africa such as China, Brazil, India, Korea, Kuwait and Saudi Arabia.
Saudi Arabia and Kuwait have become key emerging creditors in Mauritania, Eritrea, The Comoros, Sudan and Guinea-Bissau. As the report states with regard to these new creditors in Africa : "Many have non-traditional financial structures that hamper the assessment of their impact on debt sustainability," said the Bretton Woods institutions. Such debates are likely to increase as the Middle East becomes a more avid player in SSA in the near future.
Angola made international headlines when it became the 12th full member of the Organization of Petroleum Exporting Countries (OPEC) in 2006, but it is increasingly clear that Africa-Middle East relations are set to move significantly beyond just oil.
Amre Moussa is a former Egyptian Minister of Foreign Affairs and current Secretary-General of the Arab League wrote in African Analyst Quarterly. he says, "All these factors point to Africa's increasing importance on the global stage and the time has never been better for our two regions to develop a formidable strategic alliance in which we aid each other, rather than compete."
*Mr. Sorbara is a commentator on African international relations
The Daily Nation
Expert warns against investment that benefits foreigners only
A South African professor has warned African governments to stop competing among themselves in a bid to attract Foreign Direct Investment. Professor Wiseman Nkuhlu said African governments should instead strive to develop appropriate policy frameworks that work for their countries.
"Individual African countries are competing to maximise FDI but if governments in Africa are not careful, we might end up giving all the advantages-yielding economic benefits for national development to foreigners," Nkuhlu said.
"Things like job creation by the private enterprises should be done in the interest of the local citizens. Incentives must also be availed to local enterprise to thrive, and affordability of goods and services in the country by the local citizens must be properly looked at by all governments in Africa so that benefits do not go to the foreigners only," he added.
A former economic advisor to South African President Thabo Mbeki, Prof. Nhuhlu said Africa as a whole still lags behind all the other continents in attracting FDI due to low levels of economic development and political instability that are still rampant in many countries, thus scaring away foreign investors.
The Monitor
"Individual African countries are competing to maximise FDI but if governments in Africa are not careful, we might end up giving all the advantages-yielding economic benefits for national development to foreigners," Nkuhlu said.
"Things like job creation by the private enterprises should be done in the interest of the local citizens. Incentives must also be availed to local enterprise to thrive, and affordability of goods and services in the country by the local citizens must be properly looked at by all governments in Africa so that benefits do not go to the foreigners only," he added.
A former economic advisor to South African President Thabo Mbeki, Prof. Nhuhlu said Africa as a whole still lags behind all the other continents in attracting FDI due to low levels of economic development and political instability that are still rampant in many countries, thus scaring away foreign investors.
The Monitor
India to promote textile trade with South Africa
In order to re-enforce business contacts and establish new buyers in Africa, India's Apparel Export Promotion Council has embarked on Buyers-Sellers Meets in South Africa. The Indian textile delegation will be led by Mr. A K Singh, Secretary in the Ministry of Textiles between 16-24 April, 2007.
The Council is a nodal agency sponsored by the India's Ministry of Textiles and is entrusted with the dual responsibility of monitoring garment exports quotas and promotion of exports of ready-made garments from India.
Over the last 25 years, the council has been continuously involved in the task of promoting exports by organising buyer-seller meets, leading trade delegations to potential markets globally, participating in specialised international fairs, organising the India International Garment Fair biannually, organising seminars on fashion and workshops on technical aspects of the industry.
In its constant endeavour to promote and expose Indian garments in the
International market for greater visibility and choice of products.
Fibre2Fashion
The Council is a nodal agency sponsored by the India's Ministry of Textiles and is entrusted with the dual responsibility of monitoring garment exports quotas and promotion of exports of ready-made garments from India.
Over the last 25 years, the council has been continuously involved in the task of promoting exports by organising buyer-seller meets, leading trade delegations to potential markets globally, participating in specialised international fairs, organising the India International Garment Fair biannually, organising seminars on fashion and workshops on technical aspects of the industry.
In its constant endeavour to promote and expose Indian garments in the
International market for greater visibility and choice of products.
Fibre2Fashion
Mozambique to host China trade meeting
Mozambique will host a meeting between fellow Portuguese-speaking countries and Chinese officials in April to discuss how to deepen economic and commercial ties.
The two-day meeting from April 18 will discuss the possibility of developing Macau as a base for Portuguese-speaking businessmen, according to a statement by the Mozambican institute of export promotion, the event’s co-organisers. Macau is a former Portuguese protectorate, situated close to Hong Kong, that reverted to Chinese rule in 2000.
The government in Beijing has been striving hard to forge stronger ties with Portuguese-speaking countries in Africa, particularly Mozambique and Angola, which is now one of China’s major suppliers of oil. Other countries which are set to be represented at the meeting are Brazil, Portugal, East Timor, Guinea Bissau, Cape Verde, and Sao Tome and Principe.
The Citizen
The two-day meeting from April 18 will discuss the possibility of developing Macau as a base for Portuguese-speaking businessmen, according to a statement by the Mozambican institute of export promotion, the event’s co-organisers. Macau is a former Portuguese protectorate, situated close to Hong Kong, that reverted to Chinese rule in 2000.
The government in Beijing has been striving hard to forge stronger ties with Portuguese-speaking countries in Africa, particularly Mozambique and Angola, which is now one of China’s major suppliers of oil. Other countries which are set to be represented at the meeting are Brazil, Portugal, East Timor, Guinea Bissau, Cape Verde, and Sao Tome and Principe.
The Citizen
Trade liberalization may harm poorest nations, FAO report warns
The results of renewed negotiations aimed at liberalizing international trade might hurt rather than help the world's poorest countries unless those nations are given the necessary leeway to protect their food security and essential development needs, the United Nations Food and Agriculture Organization has warned.
FAO urged government ministers participating in the revived Doha Round of trade talks to make sure any new rules are compatible with the Millennium Development Goal that calls for the proportion of people living in extreme poverty to be halved by 2015.
The report stated that while economically advanced countries are likely to benefit from further liberalization of the global trading system, and some developing countries are becoming much more competitive as well, others could be left behind. "Many lower-income countries, especially in sub-Saharan Africa, are less well placed to gain in the short- to medium run from trade liberalization," it said, pointing especially to those most dependent on agricultural commodities to support their development and efforts to reduce poverty.
Launching the report, the Chief of the FAO's Trade Policy Service, David Hallam, said it was not surprising that the world's poorest nations regard trade liberalization "as a threat to their domestic production and food security." If tariffs are reduced, there will be increased competition from imported foods for local products, and domestic production systems may not be able to adequately respond, threatening rural incomes and employment levels, Hallam said. "It is clear that many countries will need to be allowed some flexibility in the implementation of new trade rules, and also to be given assistance, at least for the short term, while they adjust to the new market realities arising from trade liberalization."
The report called for action to be taken to ensure that the potential benefits from trade liberalization are spread as broadly and equitably as possible, suggesting developing nations be given more training and greater policy advice on how to defend their interests during trade negotiations.
The Doha Round of trade talks stalled in 2006 year amid disputes between developed and developing countries over agricultural subsidies.
News Blaze
FAO urged government ministers participating in the revived Doha Round of trade talks to make sure any new rules are compatible with the Millennium Development Goal that calls for the proportion of people living in extreme poverty to be halved by 2015.
The report stated that while economically advanced countries are likely to benefit from further liberalization of the global trading system, and some developing countries are becoming much more competitive as well, others could be left behind. "Many lower-income countries, especially in sub-Saharan Africa, are less well placed to gain in the short- to medium run from trade liberalization," it said, pointing especially to those most dependent on agricultural commodities to support their development and efforts to reduce poverty.
Launching the report, the Chief of the FAO's Trade Policy Service, David Hallam, said it was not surprising that the world's poorest nations regard trade liberalization "as a threat to their domestic production and food security." If tariffs are reduced, there will be increased competition from imported foods for local products, and domestic production systems may not be able to adequately respond, threatening rural incomes and employment levels, Hallam said. "It is clear that many countries will need to be allowed some flexibility in the implementation of new trade rules, and also to be given assistance, at least for the short term, while they adjust to the new market realities arising from trade liberalization."
The report called for action to be taken to ensure that the potential benefits from trade liberalization are spread as broadly and equitably as possible, suggesting developing nations be given more training and greater policy advice on how to defend their interests during trade negotiations.
The Doha Round of trade talks stalled in 2006 year amid disputes between developed and developing countries over agricultural subsidies.
News Blaze
April 11, 2007
South Africa-Tanzania trade up dramatically
Tanzanian Ppresident Jakaya Kikwete and South African president Thabo Mbeki held a one day summit in Dar es Salaam on April 5 for enhanced economic ties and to narrow trade imbalance between their two countries.
Trade volume reached 696.3 million US dollars in 2005, up from 314.9 million US dollars two years earlier, President Kikwete said.
The two countries were arch-enemies during apartheid with officially zero trade between them. Tanzania's exports to South Africa rose to $292 million in 2005, from $38 million in 2003. Imports from South Africa swelled to $404 million in 2005, up from $277 million in 2003.
"We (Tanzania) are indeed having a trade deficit, but this is manageable provided that the country strives to fix supply side constraints," Kikwete explained. For example, he said, there was a cement order recently from a South African customer, but suppliers in Tanzania could hardly meet a quarter of the demand.
"South Africa is the fifth biggest foreign investor in Tanzania, after the United Kingdom, Kenya, India and China. It is my hope more investment will be pumped in as Tanzania continues to improve the investment climate," Kikwete said. Figures, he said, showed that between 1990 and 2006, investment flows from South Africa reached $467 million , which accounted for 10 per cent of total external investments in the country during that period.
He said there were 150 South African firms currently operating in Tanzania, including subsidiaries of world-class corporations like Anglo-Gold Ashanti, SAB Miller, AFGEM and Absa.
Daily News
Trade volume reached 696.3 million US dollars in 2005, up from 314.9 million US dollars two years earlier, President Kikwete said.
The two countries were arch-enemies during apartheid with officially zero trade between them. Tanzania's exports to South Africa rose to $292 million in 2005, from $38 million in 2003. Imports from South Africa swelled to $404 million in 2005, up from $277 million in 2003.
"We (Tanzania) are indeed having a trade deficit, but this is manageable provided that the country strives to fix supply side constraints," Kikwete explained. For example, he said, there was a cement order recently from a South African customer, but suppliers in Tanzania could hardly meet a quarter of the demand.
"South Africa is the fifth biggest foreign investor in Tanzania, after the United Kingdom, Kenya, India and China. It is my hope more investment will be pumped in as Tanzania continues to improve the investment climate," Kikwete said. Figures, he said, showed that between 1990 and 2006, investment flows from South Africa reached $467 million , which accounted for 10 per cent of total external investments in the country during that period.
He said there were 150 South African firms currently operating in Tanzania, including subsidiaries of world-class corporations like Anglo-Gold Ashanti, SAB Miller, AFGEM and Absa.
Daily News
April 10, 2007
Moroccan bank acquires 35pc stake in Bank of Africa
The Moroccan External Trade Bank (BMCE), has acquired a 35 per cent stake in Bank of Africa, one of latest entrants into the East African financial and banking sector.
Bank of Africa (BOA) already has a dozen branches in Kenya, Uganda and Tanzania. In all three countries, the bank's branches are mainly confined to cities such as Nairobi, Dar es Salaam, Mombasa, Kampala and Jinja. Last week, the Kenyan subsidiary, which started operations in July 2004, reported a $870,000 pre-tax profit for the year ended December 31, 2006, up from the $110,000 reported the previous year.
In the short period it has operated in the region, BOA, which offers both retail and corporate banking, has participated in arranging several syndicated loans and bond issues. The commercial team has adapted to local market conditions, and developed a number of banking products for the retail sector, said BOA-Kenya managing director Phillippe Leon-Dufour.
BOA's acquisition by BMCE is expected to give the Moroccan giant a major foothold in sub-Saharan Africa, where trade and investment opportunities have opened up dramatically over the past few years, especially in insurance and telecommunications. The new partnership is particularly expected to facilitate the flow of capital from oil-rich North African states to the rest of the continent.
The East African
Bank of Africa (BOA) already has a dozen branches in Kenya, Uganda and Tanzania. In all three countries, the bank's branches are mainly confined to cities such as Nairobi, Dar es Salaam, Mombasa, Kampala and Jinja. Last week, the Kenyan subsidiary, which started operations in July 2004, reported a $870,000 pre-tax profit for the year ended December 31, 2006, up from the $110,000 reported the previous year.
In the short period it has operated in the region, BOA, which offers both retail and corporate banking, has participated in arranging several syndicated loans and bond issues. The commercial team has adapted to local market conditions, and developed a number of banking products for the retail sector, said BOA-Kenya managing director Phillippe Leon-Dufour.
BOA's acquisition by BMCE is expected to give the Moroccan giant a major foothold in sub-Saharan Africa, where trade and investment opportunities have opened up dramatically over the past few years, especially in insurance and telecommunications. The new partnership is particularly expected to facilitate the flow of capital from oil-rich North African states to the rest of the continent.
The East African
How to make development through trade work for Africa
by Peter Draper*
For the past five years the EU and its former colonies in the African, Caribbean, and Pacific (ACP) group have locked horns in potentially far-reaching trade and development negotiations. The economic partnership agreements (EPAs), are ordered in a series of regional processes, with the EU playing "hub" to six ACP regional "spokes", four of which are in Africa.
EPAs are projected to replace the ACP groups' historical reliance on EU trade preferences, through establishing reciprocal trade arrangements. World Trade Organisation (WTO) members granted the EU a grace-period or "waiver" from the WTO's rules in 2001, to phase in WTO-compatible arrangements. The waiver expires at the end of 2007, so by January 2008 EPAs must be in place or the current preferential access regime, known as the Cotonou partnership agreement, will be vulnerable to challenge.
This is of great consequence for Africa, reliant as it is on exports of various commodities to the EU under the Cotonou agreement. The agenda includes just about everything comprising a modern reciprocal trade negotiation such as trade in goods, services, and intellectual property rights.
This agenda's breadth is one of the most significant sources of tension, in the light of the fact that chunks of it (the "Singapore issues") were rejected by the Africa group and other developing countries in the WTO. The other source is the future of the EU's development assistance package for the ACP, and the extent to which it will be linked with EPA outcomes.
Unlike most civil society activists I am in favour of a broad and liberalising agenda, under certain conditions.
The economics, rooted in well-known African development challenges, point convincingly to this. Broadly, there are two agendas: supply-side constraints, and trade constraints. The former consists of a host of infrastructure needs : physical, institutional, financial, and technological. Solving them will take time, direct investment (especially foreign), appropriate regulations and implementation thereof, and money. The same logic applies to the litany of constraints traders encounter in doing business on, with, or from the continent.
The two agendas are intimately connected and need to be tackled comprehensively. The EU could play a stronger role in addressing this agenda through greater direct investment and more focused and responsive development assistance. This needs to be matched by import liberalisation on the African side. Europe produces a host of productivity-enhancing and consumer goods Africa requires on which it makes no economic sense to impose duties. Many African states depend on import tariffs for state revenues, so a tariff liberalisation package must be carefully designed; but this caveat does not undermine the broader economic case.
Beyond historical relationships and the "feel good" factor, can a business case be made for significantly increased European foreign direct investment (FDI) into the continent, beyond resource extraction? It hinges on significant regulatory upgrading and economic liberalisation in African states. There is of course no guarantee that FDI will flow based on these conditions being met; hence they are best thought of as necessary, not sufficient, preconditions.
Nonetheless, in my view the broad EPA agenda is appropriately framed. Yet the details, especially regarding the many regulatory issues within the broad agenda, are important.
In general, though, I think the regulatory agenda should not intrude unduly into African states' policy space. The key question is what might "unduly" mean in different contexts? Critically, the regulatory issues must be related to the capacity of African states to negotiate EPAs, but more importantly to implement negotiated outcomes.
This should determine the overall scope of negotiations and commitments, and the manner in which they are sequenced. The overarching goal for African negotiators should be to establish a realistic (implementable), and modernising regulatory agenda that extends and locks in reforms, backed up by requisite resources or an "aid for trade" agenda.
Metaphorically-speaking African EPAs should be Toyotas, rather than Lexus's. And therein lies the rub(ber) : the EU insists on a Lexus in the face of widespread African opposition, while conditioning the aid for trade agenda on Africans "purchasing" the Lexus. This is a recipe for entrenching drip-feed dependence on aid. And the EU holds almost all the negotiating cards : market power; financial power; and negotiating muscle. Hence it is likely that African countries will sign up.
For EPAs to be truly developmental, EU negotiators should listen to their African counterparts and agree to properly sequence the broad agenda to African capacities. That means concluding the core goods market- access deal first. Then the complex regulatory agenda should be tackled piecemeal, in tandem with a targeted resource package, to enable fragile societies and stretched negotiators to properly digest its contents before making commitments.
Is Brussels listening?
*Peter Draper is research fellow: development through trade, at the South African Institute of International Affairs.
Business Day
For the past five years the EU and its former colonies in the African, Caribbean, and Pacific (ACP) group have locked horns in potentially far-reaching trade and development negotiations. The economic partnership agreements (EPAs), are ordered in a series of regional processes, with the EU playing "hub" to six ACP regional "spokes", four of which are in Africa.
EPAs are projected to replace the ACP groups' historical reliance on EU trade preferences, through establishing reciprocal trade arrangements. World Trade Organisation (WTO) members granted the EU a grace-period or "waiver" from the WTO's rules in 2001, to phase in WTO-compatible arrangements. The waiver expires at the end of 2007, so by January 2008 EPAs must be in place or the current preferential access regime, known as the Cotonou partnership agreement, will be vulnerable to challenge.
This is of great consequence for Africa, reliant as it is on exports of various commodities to the EU under the Cotonou agreement. The agenda includes just about everything comprising a modern reciprocal trade negotiation such as trade in goods, services, and intellectual property rights.
This agenda's breadth is one of the most significant sources of tension, in the light of the fact that chunks of it (the "Singapore issues") were rejected by the Africa group and other developing countries in the WTO. The other source is the future of the EU's development assistance package for the ACP, and the extent to which it will be linked with EPA outcomes.
Unlike most civil society activists I am in favour of a broad and liberalising agenda, under certain conditions.
The economics, rooted in well-known African development challenges, point convincingly to this. Broadly, there are two agendas: supply-side constraints, and trade constraints. The former consists of a host of infrastructure needs : physical, institutional, financial, and technological. Solving them will take time, direct investment (especially foreign), appropriate regulations and implementation thereof, and money. The same logic applies to the litany of constraints traders encounter in doing business on, with, or from the continent.
The two agendas are intimately connected and need to be tackled comprehensively. The EU could play a stronger role in addressing this agenda through greater direct investment and more focused and responsive development assistance. This needs to be matched by import liberalisation on the African side. Europe produces a host of productivity-enhancing and consumer goods Africa requires on which it makes no economic sense to impose duties. Many African states depend on import tariffs for state revenues, so a tariff liberalisation package must be carefully designed; but this caveat does not undermine the broader economic case.
Beyond historical relationships and the "feel good" factor, can a business case be made for significantly increased European foreign direct investment (FDI) into the continent, beyond resource extraction? It hinges on significant regulatory upgrading and economic liberalisation in African states. There is of course no guarantee that FDI will flow based on these conditions being met; hence they are best thought of as necessary, not sufficient, preconditions.
Nonetheless, in my view the broad EPA agenda is appropriately framed. Yet the details, especially regarding the many regulatory issues within the broad agenda, are important.
In general, though, I think the regulatory agenda should not intrude unduly into African states' policy space. The key question is what might "unduly" mean in different contexts? Critically, the regulatory issues must be related to the capacity of African states to negotiate EPAs, but more importantly to implement negotiated outcomes.
This should determine the overall scope of negotiations and commitments, and the manner in which they are sequenced. The overarching goal for African negotiators should be to establish a realistic (implementable), and modernising regulatory agenda that extends and locks in reforms, backed up by requisite resources or an "aid for trade" agenda.
Metaphorically-speaking African EPAs should be Toyotas, rather than Lexus's. And therein lies the rub(ber) : the EU insists on a Lexus in the face of widespread African opposition, while conditioning the aid for trade agenda on Africans "purchasing" the Lexus. This is a recipe for entrenching drip-feed dependence on aid. And the EU holds almost all the negotiating cards : market power; financial power; and negotiating muscle. Hence it is likely that African countries will sign up.
For EPAs to be truly developmental, EU negotiators should listen to their African counterparts and agree to properly sequence the broad agenda to African capacities. That means concluding the core goods market- access deal first. Then the complex regulatory agenda should be tackled piecemeal, in tandem with a targeted resource package, to enable fragile societies and stretched negotiators to properly digest its contents before making commitments.
Is Brussels listening?
*Peter Draper is research fellow: development through trade, at the South African Institute of International Affairs.
Business Day
Competition from China squeezes developing countries
Three years ago, the textile plant that Freddy Romero Ramirez runs in Bogotá exported 234,575 meters of fabric for suit linings, enough for about 156,000 suits. This year, facing strong competition from Chinese companies, he will sell less than 3 percent of that amount abroad. "There is no way local industry can survive the force of Chinese trade unless similar forceful measures are taken by the government," said Romero.
China's emergence as a world trade powerhouse, blamed in the United States and Western Europe for the loss of thousands of factory jobs, is having an even more severe impact on developing nations. Support for free trade is dwindling as industry groups in countries around the globe lobby for protection against Chinese competition.
Frank Vargo, vice president for international economic affairs at the National Association of Manufacturers in Washington, calls fear of Chinese competition "one of the most important impediments" to a world trade agreement in the current Doha round of negotiations. Much of the impact comes from Chinese textile exports, which accounted for about 70 percent of the country"s record $177.5 billion trade surplus last year, according to the Chinese Textile Industry Association.
Turkish textile companies cut about 10 percent of their work forces in 2005 and 2006 in the face of Chinese competition. A sales-tax cut and a weaker lira have helped them only partially recover.
But perhaps no region has felt the shock more than Central and South America. "The least developed countries in Latin America are scared to death," said William Reinsch, president of the Washington-based National Foreign Trade Council. In Colombia, Chinese textiles are displacing products in domestic as well as export markets, said Ivan Amaya, president of the Colombian Association of Textile Producers.
"You have to constantly be innovative and stay ahead of the Chinese as far as designs and colors are concerned, but they always catch up," said Romero, who now employs 62 workers after dismissing 12 in the past three years.
Amaya said that without government measures, Colombian denim, cotton-shirt and trouser production may vanish in three years, along with 14,000 jobs.
Elsewhere in Latin America, industry executives with similar grievances are demanding relief from their governments. Peruvian producers have asked the government to investigate their complaint that China is dumping textiles and apparel at below-market prices. "The Chinese sell their wares at prices that don't even cover the cost of the raw material," said Martin Reano, general manager of the textiles committee of the Lima-based National Industry Society. "No one can compete with that."
Chinese officials reject the notion that their country's success comes at the expense of others. "China itself is a developing nation," said Qin Gang, spokesman for the Chinese Foreign Ministry.
"We in particular want small developing nations to enjoy sustainable development and growth. We offer them support, loans and subsidies, much more so than developed nations."
After Lesotho complained in 2006 that Chinese garments were forcing local industries out of business, ZTE, the largest publicly traded manufacturer of telephone equipment in China, announced a $30 million project to build phone networks in Lesotho and Ghana.
In Latin America, Chinese demand has pushed up the prices of copper, iron ore, soybeans and other commodities produced in the region. Exports to China from Latin American and Caribbean nations increased at an average annual rate of 35 percent, after inflation, between 2000 and 2005, according to the World Bank.
Still, competitive pressure from China intensified with the phasing out in 2005 of the Multi-Fiber Agreement. Before that, China and Latin America each accounted for around a quarter of the US clothing market. Now, the Chinese share has climbed to 30 percent while the Latin American share has shrunk to 18 percent, according to the National Council of Textile Organisations in Washington.
When the US lifts quotas on Chinese textile imports in 2009, "China is likely to demolish the competition," said Cass Johnson, president of the textile council.
The Statesman
China's emergence as a world trade powerhouse, blamed in the United States and Western Europe for the loss of thousands of factory jobs, is having an even more severe impact on developing nations. Support for free trade is dwindling as industry groups in countries around the globe lobby for protection against Chinese competition.
Frank Vargo, vice president for international economic affairs at the National Association of Manufacturers in Washington, calls fear of Chinese competition "one of the most important impediments" to a world trade agreement in the current Doha round of negotiations. Much of the impact comes from Chinese textile exports, which accounted for about 70 percent of the country"s record $177.5 billion trade surplus last year, according to the Chinese Textile Industry Association.
Turkish textile companies cut about 10 percent of their work forces in 2005 and 2006 in the face of Chinese competition. A sales-tax cut and a weaker lira have helped them only partially recover.
But perhaps no region has felt the shock more than Central and South America. "The least developed countries in Latin America are scared to death," said William Reinsch, president of the Washington-based National Foreign Trade Council. In Colombia, Chinese textiles are displacing products in domestic as well as export markets, said Ivan Amaya, president of the Colombian Association of Textile Producers.
"You have to constantly be innovative and stay ahead of the Chinese as far as designs and colors are concerned, but they always catch up," said Romero, who now employs 62 workers after dismissing 12 in the past three years.
Amaya said that without government measures, Colombian denim, cotton-shirt and trouser production may vanish in three years, along with 14,000 jobs.
Elsewhere in Latin America, industry executives with similar grievances are demanding relief from their governments. Peruvian producers have asked the government to investigate their complaint that China is dumping textiles and apparel at below-market prices. "The Chinese sell their wares at prices that don't even cover the cost of the raw material," said Martin Reano, general manager of the textiles committee of the Lima-based National Industry Society. "No one can compete with that."
Chinese officials reject the notion that their country's success comes at the expense of others. "China itself is a developing nation," said Qin Gang, spokesman for the Chinese Foreign Ministry.
"We in particular want small developing nations to enjoy sustainable development and growth. We offer them support, loans and subsidies, much more so than developed nations."
After Lesotho complained in 2006 that Chinese garments were forcing local industries out of business, ZTE, the largest publicly traded manufacturer of telephone equipment in China, announced a $30 million project to build phone networks in Lesotho and Ghana.
In Latin America, Chinese demand has pushed up the prices of copper, iron ore, soybeans and other commodities produced in the region. Exports to China from Latin American and Caribbean nations increased at an average annual rate of 35 percent, after inflation, between 2000 and 2005, according to the World Bank.
Still, competitive pressure from China intensified with the phasing out in 2005 of the Multi-Fiber Agreement. Before that, China and Latin America each accounted for around a quarter of the US clothing market. Now, the Chinese share has climbed to 30 percent while the Latin American share has shrunk to 18 percent, according to the National Council of Textile Organisations in Washington.
When the US lifts quotas on Chinese textile imports in 2009, "China is likely to demolish the competition," said Cass Johnson, president of the textile council.
The Statesman
Mozambique prepares for EPA negotiations
The Mozambican government is preparing its position for negotiations with the European Union, scheduled to begin in May, on the controversial Economic Partnership Agreements (EPAs).
The Southern African Development Community (SADC) intends to negotiate with the EU as a bloc, and the EU has accepted the request that South Africa be included in these negotiations, even though the Europeans do not regard South Africa as a poor country.
The EPAs will mark the end of most preferential deals for the ACP countries, and will force open the markets of the least advanced countries to European products, possibly with disastrous results for nascent industries. The EU's excuse is that it has no choice because the current preferential arrangements are regarded as "illegal" under the rules of the World Trade Organisation (WTO).
For the poorest countries, the EU has the initiative known as EBA (Everything but Arms), whereby all goods from those countries, except armaments, can enter the EU duty and quota free. But the EU has not extended EBA to SADC as a whole due to the presence of South Africa,
regarded as far too rich for such treatment.
Last year, in its list of requests to the EU, SADC said it was not in a condition to put the services market on the negotiating table. It also suggested that the EU cooperate further with SADC to build up the region's infrastructure and its legal framework. In its reply, the EU said that these matters should be negotiated.
"We have to decide about these replies, and so we have to undertake consultations so that we can see whether they protect us or not", said Cerina Mussa, the national director of international relations in the trade ministry. "We have to decide what conditions we should demand before starting the negotiations".
The major concern for SADC countries in negotiating EPAs is that these should not be restricted to matters of trade, but should also guarantee development. As an ACP secretariat presentation on the EPAs put it, their objectives ought to be "the sustainable development of the ACP states, their smooth and gradual integration into the world market, and the eradication of poverty". Fears remain, however, that if developing countries are forced to open their markets to EU goods and services prematurely the result will be job losses, a drop in government revenue and cuts in public services.
The EU has tried to calm such fears by dangling a large carrot before the ACP states. It proposed to remove all remaining quota and tariff limitations on access to the European market for all ACP countries, with the exception of South Africa. That, the EU says, will give the same access to the other ACP countries that only the poorest have so far enjoyed under the EBA initiative.
AllAfrica.com
The Southern African Development Community (SADC) intends to negotiate with the EU as a bloc, and the EU has accepted the request that South Africa be included in these negotiations, even though the Europeans do not regard South Africa as a poor country.
The EPAs will mark the end of most preferential deals for the ACP countries, and will force open the markets of the least advanced countries to European products, possibly with disastrous results for nascent industries. The EU's excuse is that it has no choice because the current preferential arrangements are regarded as "illegal" under the rules of the World Trade Organisation (WTO).
For the poorest countries, the EU has the initiative known as EBA (Everything but Arms), whereby all goods from those countries, except armaments, can enter the EU duty and quota free. But the EU has not extended EBA to SADC as a whole due to the presence of South Africa,
regarded as far too rich for such treatment.
Last year, in its list of requests to the EU, SADC said it was not in a condition to put the services market on the negotiating table. It also suggested that the EU cooperate further with SADC to build up the region's infrastructure and its legal framework. In its reply, the EU said that these matters should be negotiated.
"We have to decide about these replies, and so we have to undertake consultations so that we can see whether they protect us or not", said Cerina Mussa, the national director of international relations in the trade ministry. "We have to decide what conditions we should demand before starting the negotiations".
The major concern for SADC countries in negotiating EPAs is that these should not be restricted to matters of trade, but should also guarantee development. As an ACP secretariat presentation on the EPAs put it, their objectives ought to be "the sustainable development of the ACP states, their smooth and gradual integration into the world market, and the eradication of poverty". Fears remain, however, that if developing countries are forced to open their markets to EU goods and services prematurely the result will be job losses, a drop in government revenue and cuts in public services.
The EU has tried to calm such fears by dangling a large carrot before the ACP states. It proposed to remove all remaining quota and tariff limitations on access to the European market for all ACP countries, with the exception of South Africa. That, the EU says, will give the same access to the other ACP countries that only the poorest have so far enjoyed under the EBA initiative.
AllAfrica.com
East Africa moves to form its own bloc in EPA talks
The East African Community is looking to act as a separate bloc in the ongoing negotiations over Economic Partnership Agreements between the European Union and African, Caribbean and Pacific countries.
Sources say that the Community's senior officials were to discuss the issue of Kenya, Uganda and Tanzania withdrawing from their current EPA negotiation blocs. Kenya and Uganda are part of a 16-nation group currently negotiating EPAs as the East and Southern African (ESA) countries. Tanzania belongs to the Southern African Development Community (SADC).
Cross-membership of different trade blocs has been a contentious issue even at the level of the EAC alone, with Kenya and Uganda firmly rooted in the Common Market for Eastern and Southern Africa while Tanzania remains faithful to SADC. As trade harmonisation policies became a hot issue in the EAC, the partner states agreed to let the three countries remain in their blocs until December 2008, when they would decide on uniformity.
While this remains on course, the urgency of the EPA talks, which must be concluded by December 31 2006, could provide a shortcut to the solution of a long-standing issue. Already, Tanzania is under intense pressure from the EU and the local business community to withdraw its membership from SADC and join the other EAC partner states in Comesa to facilitate harmony in the EPA negotiations. This means that Kenya and Uganda will also have to quit the East and Southern African bloc.
The pressure was always going to be on Tanzania to cede its SADC membership, as it is already a member of the EAC Customs Union. It also makes sense as Tanzania does more business within COMESA as opposed to the Southern African bloc.
The EAC is the first trading bloc on the continent to have a Customs Union.
The East African
Sources say that the Community's senior officials were to discuss the issue of Kenya, Uganda and Tanzania withdrawing from their current EPA negotiation blocs. Kenya and Uganda are part of a 16-nation group currently negotiating EPAs as the East and Southern African (ESA) countries. Tanzania belongs to the Southern African Development Community (SADC).
Cross-membership of different trade blocs has been a contentious issue even at the level of the EAC alone, with Kenya and Uganda firmly rooted in the Common Market for Eastern and Southern Africa while Tanzania remains faithful to SADC. As trade harmonisation policies became a hot issue in the EAC, the partner states agreed to let the three countries remain in their blocs until December 2008, when they would decide on uniformity.
While this remains on course, the urgency of the EPA talks, which must be concluded by December 31 2006, could provide a shortcut to the solution of a long-standing issue. Already, Tanzania is under intense pressure from the EU and the local business community to withdraw its membership from SADC and join the other EAC partner states in Comesa to facilitate harmony in the EPA negotiations. This means that Kenya and Uganda will also have to quit the East and Southern African bloc.
The pressure was always going to be on Tanzania to cede its SADC membership, as it is already a member of the EAC Customs Union. It also makes sense as Tanzania does more business within COMESA as opposed to the Southern African bloc.
The EAC is the first trading bloc on the continent to have a Customs Union.
The East African
Malawi's SACU textile zero-tariff extension expires, jobs threatened
Malawi's government has failed to seal a textile tax-free export extension deal with the Southern African Customs Union (SACU), which means over 6,000 jobs in the country's textile industry are threatened.
The most recent three-month extension expired in March before a replacement facility had been clinched with SACU countries. Each extension means a lot to Malawi's textile industry because it allows duty-free export status. Now textile companies will face heavy tax tariffs when exporting their products to the SADC region.
SACU comprises Botswana, Namibia, Lesotho, South Africa and Swaziland Four countries;Malawi, Mozambique, Tanzania and Zambia, have since 2000 been allowed to export textiles and garments to the SACU duty free. Ken Lipenga, minister of trade, confirmed that SACU said no to another duty free extension because Malawi failed to meet some SACU requirements, although he declined to give specifics.
But a top government official said, "It appears that common-tariff measures that were supposed to be implemented last year to boost bilateral trade have been delayed by Malawi. The ministries of Finance and of Trade were supposed to gazette these new common-tariff measures some time back but failed to do so. That might have been seen as reluctance to reciprocate to SADC concessions. South Africa and the other countries formed SACU with a common custom tariff policy. Since most of the imported goods enter the sub-region through South African ports, a system of custom revenue sharing is in place. Malawi failed to meet this custom revenue sharing, the source revealed.
Lipenga replied,"If that is the case then there is always a way that this problem can be solved, although we believe we were reciprocating." He said it was unfortunate that efforts to meet SACU officials were not successful and that the end result has not been good for Malawi.
"However we did our part; we managed to get two extensions-the first six months extension which ended in December 2006, and the other one that has just expired in March. We will be exploring other possibilities, but we know it will be difficult," Lipenga said. "We are negotiating with our American counterparts in the America Growth and Opportunity Act (AGOA) to see if Malawi can expand on that market, but there is stiff competition in AGOA because of Chinese textile imports.
A source at Knitwear Industries in Blantyre said it has has been tough going for most textile companies in the country for the past year, largely because it is not easy to find new markets. "Most knitting companies have gone into T-shirt manufacturing and printing business because that's where markets are readily available."
But Lipenga agrees that failure to get a new deal on duty free exports in SACU will now threaten the 6,000 jobs in the textile and garment manufacturing sector. "Despite Malawi benefiting from Agoa, SACU remained an important export," he said.
Malawi's export quota of textiles and garments was at 12.5 million tonnes.
The most recent three-month extension expired in March before a replacement facility had been clinched with SACU countries. Each extension means a lot to Malawi's textile industry because it allows duty-free export status. Now textile companies will face heavy tax tariffs when exporting their products to the SADC region.
SACU comprises Botswana, Namibia, Lesotho, South Africa and Swaziland Four countries;Malawi, Mozambique, Tanzania and Zambia, have since 2000 been allowed to export textiles and garments to the SACU duty free. Ken Lipenga, minister of trade, confirmed that SACU said no to another duty free extension because Malawi failed to meet some SACU requirements, although he declined to give specifics.
But a top government official said, "It appears that common-tariff measures that were supposed to be implemented last year to boost bilateral trade have been delayed by Malawi. The ministries of Finance and of Trade were supposed to gazette these new common-tariff measures some time back but failed to do so. That might have been seen as reluctance to reciprocate to SADC concessions. South Africa and the other countries formed SACU with a common custom tariff policy. Since most of the imported goods enter the sub-region through South African ports, a system of custom revenue sharing is in place. Malawi failed to meet this custom revenue sharing, the source revealed.
Lipenga replied,"If that is the case then there is always a way that this problem can be solved, although we believe we were reciprocating." He said it was unfortunate that efforts to meet SACU officials were not successful and that the end result has not been good for Malawi.
"However we did our part; we managed to get two extensions-the first six months extension which ended in December 2006, and the other one that has just expired in March. We will be exploring other possibilities, but we know it will be difficult," Lipenga said. "We are negotiating with our American counterparts in the America Growth and Opportunity Act (AGOA) to see if Malawi can expand on that market, but there is stiff competition in AGOA because of Chinese textile imports.
A source at Knitwear Industries in Blantyre said it has has been tough going for most textile companies in the country for the past year, largely because it is not easy to find new markets. "Most knitting companies have gone into T-shirt manufacturing and printing business because that's where markets are readily available."
But Lipenga agrees that failure to get a new deal on duty free exports in SACU will now threaten the 6,000 jobs in the textile and garment manufacturing sector. "Despite Malawi benefiting from Agoa, SACU remained an important export," he said.
Malawi's export quota of textiles and garments was at 12.5 million tonnes.
Dropping cotton prices shake Africa
Four years of falling prices on the world market have West Africa`s all-important cotton industry on the brink of collapse.
World cotton prices, responsible for nearly 70 percent of impoverished Burkina Faso`s cash exports and income for more than a quarter of its 13 million people, are now at the lowest since the Great Depression of the 1930s, the Times of London said.
The market is said to be reeling because of what locals call 'the monster with three heads,' namely, the dollar, low world prices and U.S. cotton subsidies.
The United States` 25,000 cotton farmers receive subsidies totaling some $4 billion, reportedly allowing them to undercut their developing competitors.
The World Trade Organization ruled the subsidies illegal three years ago but only 10 percent has been shaved so far, reports say.
Global trade talks have stalled as West Africa`s four main cotton producers, Burkina Faso, Mali, Chad and Benin, demand better treatment.
UPI
World cotton prices, responsible for nearly 70 percent of impoverished Burkina Faso`s cash exports and income for more than a quarter of its 13 million people, are now at the lowest since the Great Depression of the 1930s, the Times of London said.
The market is said to be reeling because of what locals call 'the monster with three heads,' namely, the dollar, low world prices and U.S. cotton subsidies.
The United States` 25,000 cotton farmers receive subsidies totaling some $4 billion, reportedly allowing them to undercut their developing competitors.
The World Trade Organization ruled the subsidies illegal three years ago but only 10 percent has been shaved so far, reports say.
Global trade talks have stalled as West Africa`s four main cotton producers, Burkina Faso, Mali, Chad and Benin, demand better treatment.
UPI
April 04, 2007
New EU trade deal offers free market access to ACP states
The European Union on April 4 said it was ready to remove all quotas and tariffs on farm and industrial goods exported to the 27-nation bloc by African, Caribbean and Pacific (ACP) states. The wide-ranging EU trade offer also calls on the 77 ACP states to open up their markets to EU goods, but over a longer period, giving the countries time to adapt to free. ACP governments will be able to protect sensitive products where the removal of import duties could threaten local producers.
The EU proposal, part of current negotiations on a so-called economic partnership pact between the EU and ACP states, covers agricultural products like beef, dairy, cereals and all fruit and vegetables which are currently subject to EU market restrictions. Officials said the EU was ready to implement the offer as of January 1, 2008, with a phase-in period for rice and sugar.
South Africa, which has a separate free trade agreement with the EU, is not covered by the new deal. As such, officials said several South African 'globally competitive products' will continue to pay import duties in the EU.
Under current EU arrangements, only 40 least developed ACP states have tariff-free and quota-free access to the EU. The new deal extends the favourable regime to all ACP states. Officials said this would encourage neighbouring ACP countries to cooperate in building regional markets and supply chains.
The European Commission fended off critics who say that instead of negotiating a free trade deal with ACP states, the EU should continue the current Cotonou Agreement which does not demand market-opening reciprocity from poor nations. EU officials said World Trade Organization rules required a change in the Cotonou arrangement and that a WTO waiver or exception for the agreement would run out at the end of 2007.
Officials also contended that the more modern trade arrangement under negotiation would help boost regional cooperation in Africa and said that ACP governments should not be too concerned about losing income from the elimination of tariffs. 'Replacing customs tariffs by other sources of fiscal revenue is a reform most countries have made,' said an EU official, speaking on condition of anonymity. He also rejected charges that farmers and industrialists in ACP states would lose out because of EU exports to the region. 'The idea that ACP countries are always threatened by imports is mistaken...it is healthy for countries, including developing countries, to take in new imports,' the official said.
The EU is negotiating economic partnership deals with 6 African, Caribbean and Pacific (ACP) regions, including the Caribbean, West Africa, East and Southern Africa, Central Africa, Southern Africa and the Pacific.
The EU proposal, part of current negotiations on a so-called economic partnership pact between the EU and ACP states, covers agricultural products like beef, dairy, cereals and all fruit and vegetables which are currently subject to EU market restrictions. Officials said the EU was ready to implement the offer as of January 1, 2008, with a phase-in period for rice and sugar.
South Africa, which has a separate free trade agreement with the EU, is not covered by the new deal. As such, officials said several South African 'globally competitive products' will continue to pay import duties in the EU.
Under current EU arrangements, only 40 least developed ACP states have tariff-free and quota-free access to the EU. The new deal extends the favourable regime to all ACP states. Officials said this would encourage neighbouring ACP countries to cooperate in building regional markets and supply chains.
The European Commission fended off critics who say that instead of negotiating a free trade deal with ACP states, the EU should continue the current Cotonou Agreement which does not demand market-opening reciprocity from poor nations. EU officials said World Trade Organization rules required a change in the Cotonou arrangement and that a WTO waiver or exception for the agreement would run out at the end of 2007.
Officials also contended that the more modern trade arrangement under negotiation would help boost regional cooperation in Africa and said that ACP governments should not be too concerned about losing income from the elimination of tariffs. 'Replacing customs tariffs by other sources of fiscal revenue is a reform most countries have made,' said an EU official, speaking on condition of anonymity. He also rejected charges that farmers and industrialists in ACP states would lose out because of EU exports to the region. 'The idea that ACP countries are always threatened by imports is mistaken...it is healthy for countries, including developing countries, to take in new imports,' the official said.
The EU is negotiating economic partnership deals with 6 African, Caribbean and Pacific (ACP) regions, including the Caribbean, West Africa, East and Southern Africa, Central Africa, Southern Africa and the Pacific.
April 03, 2007
'Aid for Trade' needs critical examination
by Brendan Vickers
African exporters confront two major challenges in today's global economy. The first relates to market access abroad, where levels of protectionism, including domestic subsidies and export support, are still scandalously high.
The second challenge is the infrastructural and technical capacities to trade. In Uganda, for example, transport costs add the equivalent of an 80% tax on clothing exports. Here in SA, local entrepreneurs often argue that the Durban port has much to learn from Dubai's efficiency.
Sound economic infrastructure is an important key to unlocking export potential, facilitating trade and attracting investment. The Mozal investment in Mozambique, while certainly replete with many problems, has, for instance, doubled that country's exports and added 7% to gross domestic product (GDP).
Without adequate trade-related infrastructure, such as roads, railways and ports, Africa will find it hard to break into world markets and accelerate growth and poverty eradication. Indeed, the World Bank estimates that a 1% rise in the stock of infrastructure could add 1% to the level of GDP. The South African government's R370bn ($510 million) capital expenditure programme will hopefully be a similar vector for growth.
It is within this context and the revitalised Doha Round of trade negotiations that the Aid for Trade (A4T) agenda assumes increased importance. A4T broadly involves the provision of development assistance aimed at increasing the participation of developing countries in the global trading system. It is not a new concept, but involves such ideas as trade-related financial and technical assistance, and capacity building.
Thus far, however, the debate has been largely driven by the Group of Eight, donor countries, the World Bank and the International Monetary Fund. World Trade Organisation chief Pascal Lamy has also established a task force on A4T, which has made some good recommendations.
Although Africa has not been shy in crafting its vision for A4T, decades of experience suggest the powerful, political and often self-serving global aid industry could easily trump these ideals. Aid, packaged with many stringent policy conditions, has a controversial history in Africa. African civil society and business groups have thus raised a number of concerns about A4T. In particular, there is some anxiety that easy promises of A4T will be used to put pressure on developing countries into further, binding tariff cuts and liberalisation. Related to this, A4T may divert attention away from negotiating a real developmental outcome to the Doha Round: fairer, more equitable rules for developing countries.
There are also fears that A4T may not involve new resources, but repackage existing aid initiatives geared to social development (such as education, health and sanitation). It may even consist of new concessional loans that will sink developing countries further into debt. Donor countries have indeed indicated that additional resources appear unlikely, given that they have already made their aid commitments until 2010.
Finally, it is argued that if A4T spending is focused exclusively on technical assistance and capacity building, it will exacerbate the negative effects of existing trade rules on developing countries. Aid to support the implementation of these rules is contrary to the mandate of A4T and the broader Doha development agenda.
Given these disquiets, how should developing countries approach the A4T agenda and what role can business, exporters and broader civil society forces play?
First, it is important to critically interrogate the assumptions underlying A4T and redefine its parameters from a pro-poor developmental perspective. Thus conceived, A4T would assist developing countries to enhance and diversify the productive capacity of their agriculture, manufacturing and services sectors; assist with the construction of roads to link local, regional and international markets; and support the development of small, medium and micro enterprises.
Second, there is the need to draw lessons from the problems and failures of existing trade-related aid initiatives. These programmes have yet to adequately address some of the most urgent challenges facing developing countries. This includes raising productivity in agriculture, manufacturing and services sectors, and creating jobs.
Third, business and civil society should help to strengthen country ownership of A4T programmes. This involves identifying and formulating their country's unique trade-related needs and priorities.
Fourth, it is important to mainstream A4T into national development policies, linking aid programmes and disbursements to poverty reduction strategies. This includes sensitising A4T to local gender, cultural, environmental and social realities.
*Senior researcher, Institute for Global Dialogue, South Africa
AllAfrica.com
African exporters confront two major challenges in today's global economy. The first relates to market access abroad, where levels of protectionism, including domestic subsidies and export support, are still scandalously high.
The second challenge is the infrastructural and technical capacities to trade. In Uganda, for example, transport costs add the equivalent of an 80% tax on clothing exports. Here in SA, local entrepreneurs often argue that the Durban port has much to learn from Dubai's efficiency.
Sound economic infrastructure is an important key to unlocking export potential, facilitating trade and attracting investment. The Mozal investment in Mozambique, while certainly replete with many problems, has, for instance, doubled that country's exports and added 7% to gross domestic product (GDP).
Without adequate trade-related infrastructure, such as roads, railways and ports, Africa will find it hard to break into world markets and accelerate growth and poverty eradication. Indeed, the World Bank estimates that a 1% rise in the stock of infrastructure could add 1% to the level of GDP. The South African government's R370bn ($510 million) capital expenditure programme will hopefully be a similar vector for growth.
It is within this context and the revitalised Doha Round of trade negotiations that the Aid for Trade (A4T) agenda assumes increased importance. A4T broadly involves the provision of development assistance aimed at increasing the participation of developing countries in the global trading system. It is not a new concept, but involves such ideas as trade-related financial and technical assistance, and capacity building.
Thus far, however, the debate has been largely driven by the Group of Eight, donor countries, the World Bank and the International Monetary Fund. World Trade Organisation chief Pascal Lamy has also established a task force on A4T, which has made some good recommendations.
Although Africa has not been shy in crafting its vision for A4T, decades of experience suggest the powerful, political and often self-serving global aid industry could easily trump these ideals. Aid, packaged with many stringent policy conditions, has a controversial history in Africa. African civil society and business groups have thus raised a number of concerns about A4T. In particular, there is some anxiety that easy promises of A4T will be used to put pressure on developing countries into further, binding tariff cuts and liberalisation. Related to this, A4T may divert attention away from negotiating a real developmental outcome to the Doha Round: fairer, more equitable rules for developing countries.
There are also fears that A4T may not involve new resources, but repackage existing aid initiatives geared to social development (such as education, health and sanitation). It may even consist of new concessional loans that will sink developing countries further into debt. Donor countries have indeed indicated that additional resources appear unlikely, given that they have already made their aid commitments until 2010.
Finally, it is argued that if A4T spending is focused exclusively on technical assistance and capacity building, it will exacerbate the negative effects of existing trade rules on developing countries. Aid to support the implementation of these rules is contrary to the mandate of A4T and the broader Doha development agenda.
Given these disquiets, how should developing countries approach the A4T agenda and what role can business, exporters and broader civil society forces play?
First, it is important to critically interrogate the assumptions underlying A4T and redefine its parameters from a pro-poor developmental perspective. Thus conceived, A4T would assist developing countries to enhance and diversify the productive capacity of their agriculture, manufacturing and services sectors; assist with the construction of roads to link local, regional and international markets; and support the development of small, medium and micro enterprises.
Second, there is the need to draw lessons from the problems and failures of existing trade-related aid initiatives. These programmes have yet to adequately address some of the most urgent challenges facing developing countries. This includes raising productivity in agriculture, manufacturing and services sectors, and creating jobs.
Third, business and civil society should help to strengthen country ownership of A4T programmes. This involves identifying and formulating their country's unique trade-related needs and priorities.
Fourth, it is important to mainstream A4T into national development policies, linking aid programmes and disbursements to poverty reduction strategies. This includes sensitising A4T to local gender, cultural, environmental and social realities.
*Senior researcher, Institute for Global Dialogue, South Africa
AllAfrica.com
Bureaucracy and protection shape EU trade and aid
by Alan Beattie, Financial Times
Close to the heart of enthusiasts for the 50-year-old European Union is its commitment to progressive internationalism and in particular to the developing world.
Starting life in 1957 as a customs union with common import tariffs against the rest of the world, the EU's biggest external role is still international trade. And until EU foreign policy apparatus solidifies and binds the actions of its member states, it will remain the case that, as Razeen Sally, a "sceptical European" economist at the European Centre for International Political Economy think-tank puts it : "Trade and aid are the EU's real foreign policy".
Experts rate its record on promoting open trade as fair-to-good, although some of its much-vaunted poor-country trade programmes are less impressive than they appear. But the performance of EU aid distributed centrally has been pretty dismal.
On trade, the EU remains almost twice as protective of agriculture as the US, with a third of its farmers' incomes being from subsidies or artificially high prices, but only half as protective as Japan or South Korea. On manufactured goods, it applies average tariffs of just four per cent, the same as the US.
But in trade with poor countries, it is more restrictive than it appears. The EU prides itself on its "Everything But Arms" programme, a scheme that permits free imports of almost everything from the world's 50 poorest countries. But in practice it has stringent hygiene and product standards that act as a trade barrier. World Bank economists rate the EU to be almost twice as restrictive of poor country imports as the US.
It also has finicky "rules of origin" -arcane but critical restrictions on the use of materials from elsewhere to make exports. The US' "African Growth and Opportunity Act" (AGOA) preference scheme, although covering fewer countries than Everything But Arms, has waived some such import restrictions with dramatic effect. The impoverished southern African state of Lesotho, traditionally a clothing producer, in 2006 exported almost $400 million in garments to the US, much made with Chinese cotton cloth. It exports little to the EU.
If the EU's trade preferences are less impressive than they seem, its record of aid delivered centrally by the Commission is positively embarrassing. The emerging consensus on aid, as developed by peer-review at the Organisation for Economic Co-operation and Development in Paris, is that, where possible, it should be aimed at reducing poverty by supporting governments' efforts to improve the climate for growth and investment.
But the EU's parochial "good neighbour" focus - the top three recipients in 2004-05 were Turkey, Morocco and Serbia-Montenegro - stands at odds with this. Europe's neighbours tend to be middle-income countries with good access to private capital markets. Many have weak governments and a poor record on economic reform. In 2004-05 more than 45 per cent of total Commission-directed aid went to middle-income countries. OECD reviews of Commission aid have branded it slow, bureaucratic and incompetent, though OECD officials say it appears to be improving.
Europeans may see themselves as open, progressive and outward-looking. But economists examining the two aspects of foreign policy controlled centrally by the EU say it only intermittently meets that vision.
Gulf News
Close to the heart of enthusiasts for the 50-year-old European Union is its commitment to progressive internationalism and in particular to the developing world.
Starting life in 1957 as a customs union with common import tariffs against the rest of the world, the EU's biggest external role is still international trade. And until EU foreign policy apparatus solidifies and binds the actions of its member states, it will remain the case that, as Razeen Sally, a "sceptical European" economist at the European Centre for International Political Economy think-tank puts it : "Trade and aid are the EU's real foreign policy".
Experts rate its record on promoting open trade as fair-to-good, although some of its much-vaunted poor-country trade programmes are less impressive than they appear. But the performance of EU aid distributed centrally has been pretty dismal.
On trade, the EU remains almost twice as protective of agriculture as the US, with a third of its farmers' incomes being from subsidies or artificially high prices, but only half as protective as Japan or South Korea. On manufactured goods, it applies average tariffs of just four per cent, the same as the US.
But in trade with poor countries, it is more restrictive than it appears. The EU prides itself on its "Everything But Arms" programme, a scheme that permits free imports of almost everything from the world's 50 poorest countries. But in practice it has stringent hygiene and product standards that act as a trade barrier. World Bank economists rate the EU to be almost twice as restrictive of poor country imports as the US.
It also has finicky "rules of origin" -arcane but critical restrictions on the use of materials from elsewhere to make exports. The US' "African Growth and Opportunity Act" (AGOA) preference scheme, although covering fewer countries than Everything But Arms, has waived some such import restrictions with dramatic effect. The impoverished southern African state of Lesotho, traditionally a clothing producer, in 2006 exported almost $400 million in garments to the US, much made with Chinese cotton cloth. It exports little to the EU.
If the EU's trade preferences are less impressive than they seem, its record of aid delivered centrally by the Commission is positively embarrassing. The emerging consensus on aid, as developed by peer-review at the Organisation for Economic Co-operation and Development in Paris, is that, where possible, it should be aimed at reducing poverty by supporting governments' efforts to improve the climate for growth and investment.
But the EU's parochial "good neighbour" focus - the top three recipients in 2004-05 were Turkey, Morocco and Serbia-Montenegro - stands at odds with this. Europe's neighbours tend to be middle-income countries with good access to private capital markets. Many have weak governments and a poor record on economic reform. In 2004-05 more than 45 per cent of total Commission-directed aid went to middle-income countries. OECD reviews of Commission aid have branded it slow, bureaucratic and incompetent, though OECD officials say it appears to be improving.
Europeans may see themselves as open, progressive and outward-looking. But economists examining the two aspects of foreign policy controlled centrally by the EU say it only intermittently meets that vision.
Gulf News
April 02, 2007
ACP, don't sign EPAs : Ghana trade unions
"Don't sign away our future. Don't send our children begging." Those were the words of Mrs. Grace Kwabena, a farmer in Ghana at a forum organized by a trade union coalition to put pressure on African leaders to stop the Economic Partnership Agreement negotiations with the European Union.
The Ghana Trade and Livelihood Coalition (GTLC) say the EPA trade deal is aimed at perpetuating Africa, Caribbean and Pacific (ACP) countries as dumping zones for foreign agricultural producers. It has called for mass mobilization of people in ACP countries to prevail on their governments to halt the EPA negotiations while urging various parliaments not to ratify the agreement if it is signed.
An executive member of the coalition, Mr. Sylvester Bagooro, presented the group's stand at the first international workshop for alliance - building in the West African sub-region, held in Ghana. According to Bagooro, free trade agreements are not the best options for developing countries like Ghana and Burkina Faso, where 95 per cent of workers are small scale farmers.
He maintains that the agreements would deprive such farmers of their livelihoods and worsen the poverty situation in Africa. The EPA accord requires ACP countries to open their economies to competition from highly subsidized imports from the EU. Over 200 Ghanaian farmers had earlier staged a peaceful demonstration in Accra during Ghana's Farmers Day demanding that current African Union chairman, Ghanaian president John Kufuor, prevail on the AU to stop the wholesome dumping of cheap agricultural products from Europe which EPA seeks to promote.
The farmers marched to the Ghana Ministry of Finance and Economic Planning where they explained how the EU trade deal means the death of agriculture in ACP countries and their death as farmers. Singing a dirge, the farmers-mainly rice, cotton, tomato and poultry producers, decried the reluctance of African leaders to reject the agreement.
Black Britain
The Ghana Trade and Livelihood Coalition (GTLC) say the EPA trade deal is aimed at perpetuating Africa, Caribbean and Pacific (ACP) countries as dumping zones for foreign agricultural producers. It has called for mass mobilization of people in ACP countries to prevail on their governments to halt the EPA negotiations while urging various parliaments not to ratify the agreement if it is signed.
An executive member of the coalition, Mr. Sylvester Bagooro, presented the group's stand at the first international workshop for alliance - building in the West African sub-region, held in Ghana. According to Bagooro, free trade agreements are not the best options for developing countries like Ghana and Burkina Faso, where 95 per cent of workers are small scale farmers.
He maintains that the agreements would deprive such farmers of their livelihoods and worsen the poverty situation in Africa. The EPA accord requires ACP countries to open their economies to competition from highly subsidized imports from the EU. Over 200 Ghanaian farmers had earlier staged a peaceful demonstration in Accra during Ghana's Farmers Day demanding that current African Union chairman, Ghanaian president John Kufuor, prevail on the AU to stop the wholesome dumping of cheap agricultural products from Europe which EPA seeks to promote.
The farmers marched to the Ghana Ministry of Finance and Economic Planning where they explained how the EU trade deal means the death of agriculture in ACP countries and their death as farmers. Singing a dirge, the farmers-mainly rice, cotton, tomato and poultry producers, decried the reluctance of African leaders to reject the agreement.
Black Britain
FDI by developing Asian economies to benefit Africa
Foreign direct investment (FDI) in Africa by developing Asian economies is on the rise and could potentially reach much higher levels through a shift from commodities to industrial products, according to a new United Nations report which details methods to strengthen development cooperation between the two regions.
The report, a joint effort by the UN Conference on Trade and Development (UNCTAD) and the UN Development Programme (UNDP), said that Africa has been hampered from being integrated into the global marketplace by such factors as small market size, poor infrastructure, debt problems and political instability.
However, there has been considerable progress with reform in the economies of several African countries in the last decade, and thus "the challenge is to find ways and means of harnessing more investment," said the report, entitled 'Asian Foreign Direct Investment in Africa: Towards a New Era of Cooperation among Developing Countries.' Since the 1990s, outward FDI from developing Asian economies has grown significantly, reaching a new high of an estimated $90 billion in 2006. Although only a small percentage of FDI from Asia is currently earmarked for Africa, this is expected to change.
The report also said that African Governments could benefit from the examples set by many Asian countries, which have seen high economic growth and upgraded industrial activity. These countries made targeted investments in education and infrastructure, which fostered economic development and also allowed them to attract and benefit more FDI. "Asian FDI to Africa is likely to continue to grow, in view of the complementary nature of economic development between Asian and African countries," the report contends. "In particular, the rapid economic growth in Asia can be expected to lead to increased Asian investments in Africa, in natural resources, manufacturing as well as services."
Among the report's recommendations to stimulate further Asian investment in Africa are : attracting manufacturing projects and fostering domestic capabilities necessary for such activities; adopting proactive policies to spur FDI that leads to broad-based growth; and enhancing productive capacities in a variety of industries.
Accra Daily Mail
The report, a joint effort by the UN Conference on Trade and Development (UNCTAD) and the UN Development Programme (UNDP), said that Africa has been hampered from being integrated into the global marketplace by such factors as small market size, poor infrastructure, debt problems and political instability.
However, there has been considerable progress with reform in the economies of several African countries in the last decade, and thus "the challenge is to find ways and means of harnessing more investment," said the report, entitled 'Asian Foreign Direct Investment in Africa: Towards a New Era of Cooperation among Developing Countries.' Since the 1990s, outward FDI from developing Asian economies has grown significantly, reaching a new high of an estimated $90 billion in 2006. Although only a small percentage of FDI from Asia is currently earmarked for Africa, this is expected to change.
The report also said that African Governments could benefit from the examples set by many Asian countries, which have seen high economic growth and upgraded industrial activity. These countries made targeted investments in education and infrastructure, which fostered economic development and also allowed them to attract and benefit more FDI. "Asian FDI to Africa is likely to continue to grow, in view of the complementary nature of economic development between Asian and African countries," the report contends. "In particular, the rapid economic growth in Asia can be expected to lead to increased Asian investments in Africa, in natural resources, manufacturing as well as services."
Among the report's recommendations to stimulate further Asian investment in Africa are : attracting manufacturing projects and fostering domestic capabilities necessary for such activities; adopting proactive policies to spur FDI that leads to broad-based growth; and enhancing productive capacities in a variety of industries.
Accra Daily Mail
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