Are global summits on Africa useful?

by Elijah Munyi*

The China-Africa summit of 2006 marked a watershed for Africa’s economic relations.

The summit re-awakened the world’s major powers not only to China’s growing strategic influence in Africa but also highlighted Africa’s increasing importance as an energy source.

Continental summit diplomacy has now become the standard diplomatic model for countries engaging Africa.

Later this month African Heads of State will converge in Tokyo for the Tokyo International Conference on African Development (Ticad IV).

What are the implications of collective summits on Africa’s economic relations? Will they enhance convergence on foreign policy or economic strategy?

Here I posit that while summits present exigent necessity for convergence of African external policy, the rise of energy diplomacy among major world powers will in fact complicate the continent’s policy on development, financing, investment and external trade.

As oil-producing African countries enjoy greater international leverage and fiscal independence they will pull back on collective bargaining.

The EU’s Lisbon ‘Summit of Equals’ of December 2007 was attended by at least 80 heads of state from the EU and Africa and announced a new strategic partnership between the EU and Africa. Never mind that there was nothing ‘new’ in the grinding Africa-EU relations.

The Lisbon summit, however, sparked a real possibility of a shift in the structure of EU-Africa relations from the Africa, Caribbean and Pacific (ACP-guided) approach to an AU-centric agenda.

The European Union has traditionally dealt with Africa within the colonially hatched group of ACP countries.

Other major recent summits have been the inaugural Korea-Africa summit of 2006 and the inaugural India-Africa summit of 2008.

In May 2008, Japan is set to hold its fourth round of Ticad — a Japan-led summit that takes place every five years.

South Korea will have its second Korea-Africa summit in October this year.

Commercial ties and development policy for most donor countries with Africa is slowly shifting from strictly bilateral to generally continental.

This is further cemented by the fray of major multilateral donors into coalescing developed states’ bilateral development assistance into single Joint Assistance Strategies (JAS) that are aimed at aligning donor programmes with recipient governments’ economic and development priorities.

Here is the crux of the matter.

While continental summits are solidifying the idea of ‘one Africa’ externally, it’s not patent that Africa itself is coalescing to build a stronger unified bloc in its external relations.

Most people outside of Africa perceive Africa as ‘one’ in its basic problems and aspirations. This ‘one Africa’ view is the basic foundation of Africa-donor summits by big economies.

However, African states remain inimically divergent in their external policy and economic strategies. While continental summits are good in raising Africa’s visibility, they also highlight Africa’s disjointed approach to foreign relations.

Whether on trade and Economic Partnership Agreements in Lisbon, anti-dumping proposals in Beijing or millennium development goals strategy in Tokyo, African institutions hardly ever present a steadfast joint proposal and strategy on African concerns.

The AU and Nepad – Africa’s presumptive supranational institutions — are reduced to observers at such summits as each State jostles for its share of bilateral deals.

For instance, there is no suggestion of any unified African position to be presented at the forthcoming TICAD IV summit in Tokyo. Non-oil-producing countries should be particularly wary about sustained summit diplomacy and the notion of ‘one Africa.’

If Africa does not move to solidify its collective bargaining then summit diplomacy will adversely affect individual nation’s international leverage as ‘new oil powers’ emerge to hog international interest.

Major powers’ strategic objective in Africa right now is mainly gaining access to oil. The result of this strategic interest in economic relations for some African countries is that development assistance to and interest in non-oil and non-strategic countries is likely to diminish.

Similarly, as oil-producing countries experience greater leverage in external relations they are more likely to pull back from collective bargaining within African regional bodies.

Libya, Angola, and countries along the Gulf of Guinea are presently enjoying a lot of leverage in energy diplomacy.

Regional relations within the Southern African Development Community, the West African Economic and Monetary Union and the Economic Community of West African States) are thus likely to get slower as regional States adjust to the new oil powers.

A period of re-adjustment to new oil powers in Africa’s regional bodies will thus complicate continental convergence for a while.

While summit diplomacy has real opportunities for Africa to forge united positions in global transactional diplomacy, the usefulness of continental summits to Africa can only be measured by how well they contribute to the formation of such a thing as an African foreign policy or economic strategy.

*Elijah N. Munyi is a development researcher for the Korea Institute for Development Strategy in Seoul.

Daily Nation (Kenya)

World Bank optimistic about long-lasting positive economic change in Africa

by N. Janardhan*

After decades, Africa’s real GDP grew by over six per cent in 2007, outpacing the world economic growth of about five per cent. This is considered just short of the seven per cent growth needed to reduce poverty. Further, over the last seven years, Africa’s real GDP growth has averaged over 4.5 per cent — the strongest since 1970s.

This transformation is not the result of increasing or better utilisation of Western aid, but mutually beneficial and growing Asia-Africa economic engagement.

The Bank states that Asia’s growing trade and investment in Africa holds great potential for African growth. Asia now gets 27 per cent of Africa’s exports, three times more than in 1990, and Asian exports to Africa is growing 18 per cent per year, faster than anywhere else.

Accelerating Asia-Africa engagement is part of a new global trend towards growing “South-South commerce among developing countries.” The chief architects of this are China and India, whose trade bills with Africa, for example, have risen from less than $1 billion each in 1991 to $56 billion and $30 billion, respectively, in 2007.

The trade approach is contrastingly different from the emphasis on aid as a way of ending African poverty.

In his book, “The white man’s burden: why the West’s efforts to aid the rest have done so much ill and so little good,” William Easterly asserts that the aid industry is deeply flawed. Challenging the Western notion that African nations are stuck in a “poverty trap” from which they can extricate themselves only with outside help, Easterly argues that some of the Asian countries that battled poverty effectively received very little aid per capita.

“Economic development in Africa will depend — as it has elsewhere and throughout the history of the modern world — on the success of private-sector entrepreneurs, social entrepreneurs and African political reformers. It will not depend on the activities of patronising, bureaucratic, unaccountable and poorly informed outsiders,” he stresses.

Further, in a column aptly titled “The West can’t save Africa,” Easterly criticised G-8 doubling foreign aid to $50 billion and forgiving the debt incurred to fund previous “big pushes.” (It is another point altogether that aid averaged only about $14 per person annually in the poorest countries over the last 50 years and estimates show the G-8 missing their 2010 aid target by almost $30 billion)

While the West focused on genocides and their casualties, child soldiers, Aids patients and famine, Asia tackled the African crisis from a practical, and not moral, viewpoint. It engaged Africa in trade and made it the beneficiary of a process that it created and benefited from.

To condemn Western efforts as futile would be wrong, but the fact is while aid is a one-way commitment, trade makes both parties stakeholders, thereby making transformation of poor societies easier.

The other difference is that while aid has a patronising quality to it, trade partnership is based on the “fundamental principles of equality, mutual respect and understanding ... for mutual benefit.

Thirdly, Asia does not look at Africa in a homogenous fashion; its partnership is based on reality and particular conditions of the countries involved.

This is reflected in the African Union’s statement that Asia has “truly understood” Africa’s needs and aspirations. “Today, Africa does not need a guiding hand...we are equal partners in this race like everyone else.”

In fact, Asia’s engagement with Africa is not new. Among others, India was an unflinching supporter of Africa’s independence struggle against Western colonialism. But the gradual Asian shift towards Western alliances amid market reforms took the sheen of their African ties.

The Asian economic boom, however, mandated both raw materials for their manufacturing sector and a huge market for their finished products, which Africa meets. Apart from hydrocarbons, Asia has helped push up the prices of other African exports such as platinum, iron and copper, all commodities used in manufacturing. As a result, copper prices, for example, increased six-fold since 2001 and platinum prices tripled.

Moreover, after being written off by many Western governments and companies, Africa has also witnessed a dramatic rise in Asian investment.

Even the Gulf countries are not far behind in contributing towards African resurgence. This region’s investors have had a big influence on Africa’s foreign direct investment doubling to $36 billion between 2004 and 2006. Saudi Arabia, Kuwait, Qatar and the UAE are actively involved in a range of sectors, focusing primarily on infrastructure, telecoms, banking and tourism.

As part of its expanding businesses abroad, the UAE, for example, is the second largest investor in Sudan after China with total investments of $7 billion. And, IAS International, a Qatar-based investment company, announced in March the launch of about $6 billion worth of projects in the Central African Republic.

Though the George W. Bush administration has outspent Bill Clinton government’s African aid by three times, Bush has visited Africa only twice after taking over as president. In contrast, Chinese leaders visited nearly 50 African countries during 2006-07.

Apart from presidential and prime ministerial visits, China also hosted the Forum on China-Africa Cooperation in Beijing in November 2006, during which China proposed measures to increase bilateral trade to $100 billion by 2010.

To realise this, Beijing committed to double aid and offered $5 billion in loans and credits by 2009, as well as promised to cancel “more” debt owed by African countries. Reiterating that “common development is the shared aspiration of the Chinese and African peoples,” it also announced a $5 billion development fund to encourage Chinese companies to invest in Africa.

India too hosted its first-ever summit with 14 African countries this April — not only to strengthen ties by pledging to work as partners to solve economic and development challenges, but also to ensure that it is not eclipsed by its continental competitor — China.

India has assured that it will ease access for not just African exports, but for several other poor countries as well. “No one understands better than India and Africa the imperative need for global institutions to reflect current realities and to build a more equitable global economy and polity...Under this scheme, India shall unilaterally provide preferential market access for exports from all the 50 least developed countries,” 34 of them in Africa.

As a way of combating Asia’s growing influence, European and African leaders signed a pact promoting free trade and democracy in December 2007, but failed to make a breakthrough on formal trade agreements between the two continents. The meeting, the first in seven years, wanted to meet a 31 December deadline set by the World Trade Organisation for securing a new trading system with former colonies, including those in Africa. But only 15 of the 76 “poor countries” involved in talks have signed economic partnership agreements with Europe.

Senegal said a majority of African leaders opposed such agreements. In claiming that Asia’s approach was winning more friends and “Europe is close to losing the battle of competition in Africa,” the statement underlines the new approach and predicts the future trend.

*Dr N. Janardhan is a UAE-based analyst on Gulf-Asia affairs

Khaleej Times

African leaders lash out at unfair trade terms at Japan summit

African leaders recently lashed out at rich nations for erecting trade barriers that prevent the continent's economic development even as they make lofty pledges to boost aid.

The leaders, in Japan for a major development conference, urged industrialised nations to make it easier for them to export food, coffee and other products at fair prices.

"Pursuit of unfair trade practices by the big powers as well as difficult access for African products to markets of developed countries continue to penalise our states and significantly destroy their performance in the creation of riches," said Burkina Faso President Blaise Compaore.

Forty heads of states from Africa are participating in the three-day conference to discuss economic growth, stability and climate change.

Japan pledged to double aid to Africa by 2012 and to help the continent boost rice production two-fold to ease food shortages. But some African leaders said their countries were more concerned about unfair trade deals than a lack of things to eat.

"There is a big problem of food in the world now and a problem of energy. In Uganda, there is a problem of a different kind. We have too much food and no market to export it to," said Ugandan President Yoweri Musaveni. "Why? Because of bad policies in Europe, America and even in Japan," he added.

He said his country was facing "a real struggle" to get a fair deal for its natural resources, including agricultural and mineral products. For example, a kilo of unprocessed Ugandan coffee would be sold for one dollar at home but for 14 dollars in Britain after it has been refined, he said.

"I see some people here who are called donors," Museveni told the conference audience. "Now, I really have a problem with that definition. Because I don't know who's helping who," he added.

Gabon's President Omar Bongo Ondimba urged Japan to boost direct investment in Africa and open up Japanese markets to African products.

"Japan can weave with Africa a strategic partnership which is mutually beneficial," he said.

AFP

France urges more EU flexibility over EPAs with Africa

France, the forthcoming holder of the European Union's rotating presidency, has asked that the bloc display greater flexibility in talks aimed at reaching free trade accords with Africa.

The EU's executive, the European Commission, has been arguing that African, Caribbean and Pacific countries must remove at least 80 percent of the tariffs they levy on imports within a 15-year period as a result of Economic Partnership Agreements (EPAs) that are currently being negotiated. While the Commission has been undertaking the negotiations on behalf of all 27 EU countries, France is now seeking that the trade liberalisation it is demanding should be less extensive, and phased in over a longer timeframe.

French government officials recently contacted the Commission's Brussels headquarters, requesting that it display greater understanding for Africa's concerns than it has to date. France, which begins its six-month stint at the EU's helm at the beginning of July, has argued that the unrest sparked by soaring food prices in many poor countries highlights why particular attention should be paid to food and agricultural issues in the EPAs.

Despite being one of the most vigorous defenders of how the EU financially supports its own farmers, France has claimed that unequal competition in Africa between subsidised imports and locally grown produce should be avoided. Imports of cheap food can be beneficial for urban consumers, the French officials said, but they can have devastating consequences for African agriculture, which generally receives little or no support from the state.

As well as advocating flexibility, the French have asked that assistance should be given to help Africa build up the capacity of its agriculture by training farmers and boosting their access to credit, and by providing irrigation to drought-prone land. EU governments and the Commission have promised to give 2 billion euros (2.75 billion dollars) in annual 'aid for trade' to poor countries by 2010.

The Paris government has also tasked Christiane Taubira, a deputy in the French national assembly, with drawing up a report on how the EPAs can be used to promote closer ties between regions in Africa. Her report is likely to be finalised by mid-June.

Several African governments have complained that moves by the EU late last year to negotiate trade agreements with countries on an individual basis had undermined efforts to build up structures for regional economic cooperation on the continent. Mamadou Diap, Senegal's commerce minister, recently suggested that African governments needed to be more united. "We go to Brussels and we have over 80 African ministers who are individually holding sessions with the EU on the same thing," he said. "How can we make meaningful progress with such an attitude?"

Anti-poverty activists have welcomed the stance being taken by France.

"For once the French government is seeking to address the causes of the food crisis: how trade rules are unfair," said Jean-Denis Crola from Oxfam France. "The roots of the problem lie in the trade relations between the EU and the ACP."

But Peter Mandelson, the European commissioner for trade, has so far ruled out taking a more conciliatory approach towards ACP governments. He has maintained that scrapping 80 percent of tariffs is necessary in order to comply with rules on trade agreements between poor and rich countries. Such rules have been set by the World Trade Organisation.

In an opinion piece published in the International Herald Tribune May 22, Mandelson said: "Despite the caricature, the most protected farm markets in the world by far are not in the developed world, but among developing countries. Sometimes these tariffs protect subsistence farmers. But often they stand in the way of the creation of regional farm markets that could spur greater agricultural output and productivity."

Marc Maes, a trade specialist with the Belgian anti-poverty group 11.11.11, described the hard-line tone adopted by Mandelson towards some of the world's poorest countries as "incomprehensible."

Maes argued that no EPA should enter into force until assessments of their likely implications are carried out by reputable bodies that are independent of the EU institutions.

In total, 78 ACP countries have been undertaking trade negotiations with the EU. So far, just 35 of these have signed EPAs. And in most cases, the agreements reached have been officially labelled 'interim', as the Commission wishes to transform them into more comprehensive trade liberalisation packages.

Grégoire Thery from the International Federation for Human Rights (known by its French acronym, FIDH) said that the potential effects of the agreements on Africa's ability to feed its own citizens needed to be thoroughly analysed. There is currently no scrutiny, he pointed out, of how trade accords signed between the EU and foreign countries affect rights enshrined in international law.

EU governments, he added, are legally required to respect the right to food, the right of freedom from hunger, and the right to economic development. Such rights could be violated, many campaigners believe, if small farmers go out of business -- and are consequently unable to provide for their families -- because they cannot cope with pressure from subsidised imports.

"Europe has obligations to give us evidence that trade agreements won't lead to the denial of human rights," said Thery. "The EU is not able to give this evidence because the EU does not have the tool to assess the potential impact of trade agreements."

IPS

Ugandan MPs urge revocation of EPA

Parliamentarians are pressurising Uganda to revoke the interim trade agreement signed between the European Union and the East African Community.

The Ugandan MPs claim the partial Economic Partnership Agreement (EPA) signed at the close of last year entrenches “unfair treatment” of the five-member bloc. Uganda currently chairs the Community, and it is believed that Kampala spearheaded the negotiations that led to the agreement, also signed by Kenya, Tanzania, Rwanda and Burundi.

Last November, as part of the Economic Partnership Agreement negotiations, EAC initialled — without parliamentary debate — an interim framework agreement with the EU ostensibly to avoid disruption of exports to the latter bloc following the World Trade Organisation-mandated expiry of the Cotonou pact with the ACP (Africa, Caribbean and Pacific) countries. The interim agreement covers areas of market access, development and fisheries and contains a commitment to negotiate a wide range of trade-related issues by July 31, 2009.

“It is a bad agreement. It does not favour East Africa. Uganda should pull out. We have to revoke the agreement and renegotiate. That is what we are recommending,” said Felix Okot Ogong, a member of the Parliamentary Committee on Trade, Industry and Tourism. The committee is presently evaluating the significance of the trade relationship with EU. This follows a petition from over a dozen civil society groups.

“We are negotiating for permanent poverty for our people,” MP Charles Agiro, also a member of the parliamentary committee, reiterated at the end of April.

The MPs have particularly expressed concern that opening up the regional market fully will attract dumping that could undermine local producers. The MPs are expected to adopt a common position that will soon be debated by the whole House, whose recommendations are bound to be adopted and implemented by the executive.

Oxfam, one of the petitioners, claims the new trade deals between Europe and the Africa, Caribbean and Pacific countries will fracture regional integration, exacerbate poverty and make it harder for countries to break away from commodity dependence. “Despite massive pressure, many ACP countries are holding out for a fair deal. Europe needs to rethink and agree to change course.”

EU and ACP member states have been holding trade talks on the EPAs since 2002. But out of the 78 countries, fewer than half had initialled any form of deal with Europe by the deadline of December 31, last year. Initially, the aim of the talks was to conclude EPAs, which would promote poverty reduction, sustainable development and gradual integration of ACP countries into the world economy and further bolster regional integration. But Oxfam argues that ACP countries are currently trapped in a vicious circle of selling products of low value and buying products of high value.

Benson Obua Ogwal, another member of the parliamentary committee, urged the government to scrutinise the trade deals the country is getting itself into. “We want you to be mindful of the fact that EU coerced you into signing the agreement,” he said.

Trade Ministry officials, however, have assured the MPs they will first consult the other EAC member states in Arusha on the impact of the interim and final agreements before taking a comprehensive position.

Trade Minister Nelson Gagawala Wambuzi, who together with the ministry’s technocrats appeared before the Committee, said they had rushed into signing the agreement for fear of losing “our potential market for flowers and fish.”

Said the minister: “There was a deadline and we had to be part of world trade. In good faith, we didn’t want our fish to rot and our flowers to be stranded at Entebbe Airport.”

Trade Ministry Under Secretary Orone Atipo repeated his minister’s position that they signed the interim agreement to create an enabling environment for private-sector growth by putting

Under the trade agreement, the EAC commits to open its market to goods from the EU in three phases over a period of 25 years. In the first phase (2008-2010), the EAC will liberalise 64 per cent of imports from the EU; while in the second phase (2015-2023), 16 per cent of imports will be liberalised. In the last phase, (2020-2033), the EAC will liberalise two per cent, making a total of 82 per cent of imports from the EU being liberalised.

Temporarily, 18 per cent of EAC trade with the EU, which covers sensitive products, is supposed to be excluded from market liberalisation requirements. But the civil society groups assert that the provision is rendered nurgatory by the “standstill” clause whereby EAC has agreed not to increase the applied duties on all their products.

That implies that should the East African states decide to raise tariffs in sensitive agricultural areas such as dairy products, they will be unable to do so.

The Ugandan MPs have argued that despite the EU’s offer of duty free and quota free market access for all products originating from the East African Community, under the previous arrangement of Everything-But-Arms (EBA), the EAC, apart from Kenya, had already been benefiting from similar market access without strings attached.

The East African

To develop Uganda, promote urbanization, do away with villages

by Dr. Kiggundu Amin Tamale*

Uganda is poor, underdeveloped and cannot feed its people. What can be done to solve all the intractable problems facing our country?

Should we hire former presidents of economically vibrant countries such as Singapore and Malaysia to rule us? Should we all go for kyeyo (odd jobs) abroad? Should we invite the British to come and re-colonise us? What should really be done to develop Uganda?

Some regular writers in the local newspapers, such as 'development lecturer' President Museveni, as well as Okodan Akwap of Kampala International University, have proposed that Uganda should emulate the Asian economic tigers such as Malaysia, Singapore, Thailand, Japan, South Korea and Indonesia by adopting an industry-based development strategy and promoting exports of value added products.

Others such as the smooth-tongued Ethics and Integrity Minister, Dr. Nsaba Butoro (see God did not curse Africans, New Vision; September 19, 2007) have suggested that rather than depend on foreign ideas and external expert knowledge, Uganda and Africa in general should adopt locally designed development programmes.

There is also a fad-like and seemingly arcane philosophy that the promotion of the East African federation would help promote exports and elevate Uganda's economic status. While some of the above development policy proposals are plausible, their local promoters have tended to ignore one crucial thing; Uganda's unique and unfavourable location.

Unlike the 'Asian tigers', Uganda is a land-locked country with limited access to the sea, which is the cheapest means of transport.

More importantly, Uganda lacks good infrastructure, such as modern roads, modern rail systems, or well- established information and communication technology-related facilities such as the internet and telephone to reduce the cost of production, the cost of doing business, as well as its remoteness and economic isolation.

So, unless deliberate and determined efforts are made to address the location-induced challenges such as the excessively high transportation costs, the plan by the government to expand Uganda's industrial base and promote exports of value added products is likely to hit a brick wall.

Perhaps more importantly, the obsession with exports tends to obscure the fact that the domestic economy matters and that this sector is as important as the external economy (export sector).

Related to this, the government's interventionist policy stance has tended to focus more on regulating foreign currency markets to promote exports, ignoring other important market-ravaged economic sectors such as public transport.

Due to the challenges associated with building a strong export-oriented economy in Uganda, it is important that a new strategy is adopted to expand the domestic economy. My humble view is that the best development policy for Uganda today is urbanisation---that is, the transition from a rural-based society to an urban-based one.

An urban-based development policy is important in part because modern economies are built, organised and managed in cities and not in the villages. For example, Bangkok city accounts for about 44 percent of the entire Thailand gross domestic product (GDP) of $197billion.

A further benefit of an urban-based development policy is that urban centres serve as domestic markets for both industrial and agricultural products. Of equal importance, there are strong links between urban centres, especially the real estate sector, and other economic sectors such as the steel industry, the banking industry, the insurance industry, brick-making industry, the cement industry, the power sector and piped water sector.

The links and relationships between the mentioned economic sectors are essential in creating new jobs and providing the badly needed economic stimulus.

Urbanisation can also help in reducing the cost of providing infrastructure such as roads, schools, hospitals, electricity and piped water. Due to the scattered human settlement patterns as well as the existence of remote and small villages in Uganda, it is almost impossible for a resource-constrained government to provide the above mentioned infrastructure at the lowest cost possible.

But with the building of well-planned new urban centres, it becomes easy and cheap to establish a few big schools, a few big and modern hospitals, a few modern and well maintained roads, piped water facilities and power facilities to serve a large number of people living in one place.

In short, there is need to restructure Uganda's village dominated population (official statistics show that about 86 percent of Ugandans live in villages) by creating urban centres that will provide markets and jobs as well as to stimulate the domestic economic sectors such as agriculture that are currently lagging behind.

Without adopting a comprehensive and coherent urban policy, Uganda's future economic prospects appear to be bleak. Also, it is almost impossible to transform a rural based society like Uganda because in the villages there are no ideas, no role models, no good roads, no good schools and no good hospitals.

Villages are just incubators for ignorance, diseases like Ebola and malaria, misery as well as despondence. They should be eradicated!

*The author is an urban and transport expert, Executive Director of Centre for Urban Studies & Research, as well as associate consultant in urban planning at the Uganda Management Institute (UMI).

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