Communiqué sets out a road map for WTO reform; Communiqué calls for development to be at the centre of WTO reform; Agriculture subsidies and non-tariff barriers highlighted as a specific hindrance to development.
Following a meeting convened by the Pan-African Private Sector Trade and Investment Committee (PAFTRAC) and hosted by the Afreximbank, a communiqué addressed to members of the WTO and the eight candidates who have been shortlisted as the institution’s next Director General was released yesterday calling for a wide range of reforms.
The communiqué was formulated following numerous consultations with PAFTRAC members, its institutional partners, and through a comprehensive survey of the African private sector. Within it, the Committee have highlighted a number of recommendations to ensure the institution is more effective in growing global trade but doing so in a manner that is fair to all.
The communiqué stated that “ignoring the voice of Africa and other emerging economies will have dramatic consequences for and undermine the relevance of the WTO and the rules-based system at a time when multilateralism is already under threat.”
In the opening remarks at the meeting, the President of the Afreximbank stated that “Africa has played an important but largely under-valued role in the global economy.” He cited that Africa’s global share of trade has fallen from 4.4% in 1970 to 2.5% today, whilst the share of Asia has risen from 7.7% to 20% over that same period. “Whilst this is the result of numerous factors, including fragmented markets and persistent supply-side constraints,” he said, “tariff escalations and stringent standards on final goods in developed economies have limited Africa’s potential to move up value chains.”
The communiqué called for the WTO to ensure “that development issues are front and centre of its reform agenda.” They specifically called for African countries to be afforded Special and Differential Treatment that will allow flexibilities and sufficient policy space to support local industries and advance development. The African private sector also emphasised the importance of addressing subsidises and state-aid in developed economies which continue to confine Africa to the bottom of global value chains.
With the African Continental Free Trade Agreement (AfCFTA) coming into effect in 2021, they also requested that African integration under the AfCFTA and the establishment of an African Common Market is not undermined by multilateral negotiations.
The organisers called for the voice of the African private sector be “heard and considered under the multilateral framework,” so that the private sector can not only compete fairly but also grow. Trade, they said, is vital to generate the volume and quality of jobs required to absorb over 17 million young Africans who are entering the labour market every year.
The strategy is for the U.S. government to work with U.S. companies that want to do business in Africa and to work with countries in Africa that want to do business with U.S. companies
Africa has great opportunities
Two years ago, U.S. Secretary of Energy Rick Perry attended Africa Oil Week (www.Africa-OilWeek.com) to promote his country’s policies for energy on the continent. This the U.S. Assistant Secretary for Fossil Energy, Steven Winberg, attended to highlight the importance the United States places on fostering relationships with the continent.
The first question on everyone’s lips was how the recent announcement of Secretary Perry’s resignation would affect the U.S. outlook towards Africa. “If you are asking if there is going to be an Africa policy change, the answer is clearly no,” he says. “As you know, Deputy Secretary Brouillette has been nominated by the President, and he will go through the confirmation hearing. But I can tell you that the Secretary and the Deputy Secretary are in lockstep, as is the President, with policies such as Prosper Africa and Power Africa. The objective for the United States is not changing as it relates to Africa.”
Supporting U.S. Businesses in Africa
Winberg points to the fact that Prosper Africa is a cross-government initiative that involved the Department of Energy and the State Department. It is designed to support United States business and energy activities in Africa. “There are 54 countries in the continent of Africa, and we think that there are great opportunities for the United States to bring our technology and our capital to bear, especially in the energy space. I think we also have the opportunity to counter malign actor influence. And finally, and probably most importantly, Prosper Africa provides opportunities for sustainable economic development and economic development with transparency.”
“That is what the United States brings to Africa, and we are pleased to be here. We are pleased to be at this conference to help develop relationships and help develop understanding between the United States and the 54 countries in Africa.”
The strategy is for the U.S. government to work with U.S. companies that want to do business in Africa and to work with countries in Africa that want to do business with U.S. companies. “We can indeed shine a bright light on these opportunities,” Winberg adds. “We can also assist African enterprise and African countries by introducing them to US companies, and vice versa.”
“We also have opportunities for African countries to come over to the United States and work with some of our departments so they can understand how we do business and how we create a transparent business climate. We have 17 National Labs. And we are very open about what those labs do. Numerous countries send representatives to visit those labs so that they can understand the technologies that we are working on and how those technologies might be applicable to their situation. We are going to continue that activity so that we can become a long-term partner with African nations.”
The Global Role for U.S. Gas
Aside from supporting the work of U.S. businesses in Africa, Winberg is clear that he sees Africa as a prime market for the surplus of gas that the U.S. shale revolution is delivering. “I do believe there is going to be increased oil and natural gas production in Africa, but there is an interim period when African countries may want to avail themselves of our LNG exports,” he explains.
At present, the United States has the capacity to export seven billion cubic feet per day, which will grow to ten billion cubic feet per day by 2020. “In operation or under construction, we will have 15.5 billion cubic feet per day today coming online over the next several years. The Department of Energy has authorised about 35 billion cubic feet a day,” Winberg adds. “There is a lot of headroom there for countries that want to use LNG imports in the interim period while they are developing their own natural gas production.”
According to Winberg, the U.S. shale surplus offers another benefit: stabilising the market and providing security of supply. “About two and a half months ago, the Straits of Hormuz saw some hostile activity,” he says. “If you watched the Brent Crude oil price, it barely moved in and around that hostility.”
“Then on September 14, the Iranians attacked Saudi Arabia – the attack initially took out half of their production. That happened on Saturday; and on Monday when the European markets closed Brent crude was up 9 dollars and within two weeks Brent closed below pre-attack levels. That speaks volumes about the robust nature of this oil and gas market. If that attack had occurred a decade ago, we would have seen a fly up in oil prices, and I think they would have stayed up.”
“The fact that we continue to increase the level of oil that we’re producing in the United States and will be a net exporter of energy next year, reduces the impact that those types of attacks can have. And if it’s not as impactful as those perpetrators want it to be, then there’s not a lot of value. And I think that’s the real message here.”
Fighting Climate Change outside the Paris Climate Accord
Much has been made about the United States stepping away from the Paris Climate Accord, but Winberg is clear that does not mean that the U.S. is not serious about reducing carbon emissions. “The answer to reducing greenhouse gas emissions, whether it’s methane or CO2, is through technology development,” he explains. “The International Energy Agency (IEA) understands that and talks a lot about the need for carbon capture technology.”
“If you do the math, you know that without technologies such as carbon capture, utilization and storage, none of the countries can meet any of the goals that they aspire to meet. It all comes down to technology. One thing that President Trump and the Administration are adamant about is having an “all of the above” strategy in the United States. I know there are countries that want to eliminate fossil fuel from their energy mix. We do not think that is a wise decision. We think it is wise to develop technology to reduce the environmental impact of those fossil fuels, whether coal, oil or natural gas.”
“Under just about every forecast, and IEA is probably the most influential, 80 per cent of our energy needs globally will be coming from fossil fuels for the next 30 to 40 years. So, eliminating fossil energy is not practical. What is practical, is developing technologies to reduce greenhouse gas emissions and create more efficient, as well as designing a less environmentally impactful use of energy.”
Working with Africa to Deliver Growth
As for foreign policy in Africa, Winberg is clear that the Trump Administration believes that it is up to African countries to resolve whatever internal issues they have. “It is not our role to tell countries what to do,” he concludes. “However, what we can do and what we offer is an opportunity to talk to us about policies that will attract capital and policies that will attract technological investments. We will continue doing that for countries that want to develop their natural resources.”
“That has been a focus of this Administration. I said earlier that the Trump administration absolutely believes in the “all of the above” energy strategy. We want to export our technology and our natural resources. We will do everything we can to work with countries that want to avail themselves of what we have to offer, including working with them on various policy issues that they need to resolve to attract capital and attract technology.”
“This substantial support from the Women Entrepreneurs Finance Initiative, We-Fi, will help us scale up our actions and achieve greater results for women entrepreneurs across the continent” – Vanessa Moungar, Bank’s Director for Gender, Women and Civil Society.
The Governing Committee of the Women Entrepreneurs Finance Initiative (We-Fi) has approved a funding allocation of $61.8 million for the African Development Bank’s Affirmative Finance Action for Women in Africa (AFAWA) program.
We-Fi is a partnership among 14 donor governments, eight multilateral development banks, and other public and private sector stakeholders, established in October 2017 and hosted by the World Bank Group.
“This substantial support from the Women Entrepreneurs Finance Initiative, We-Fi, will help us scale up our actions and achieve greater results for women entrepreneurs across the continent. Our ambition with AFAWA goes beyond regular assistance to women in business,” Vanessa Moungar, the Bank’s Director for Gender, Women and Civil Society said about the announcement.
With the We-Fi funding, AFAWA intends to improve access to finance for 40,000 women-owned/led small and medium enterprises in 21 African countries, mainly in low-income and fragile countries, where women entrepreneurs face greater challenges in accessing finance, markets, knowledge, and mentoring programs. Specifically, the program’s activities will be implemented in Botswana, Burundi, Chad, Comoros, Côte d’Ivoire, Democratic Republic of Congo, Ethiopia, Kenya, Mali, Mauritania, Mozambique, Niger, Nigeria, Senegal, Sierra Leone, South Africa, Tanzania, Tunisia, Uganda, Zambia, and Zimbabwe.
The activities funded by We-Fi will be aligned with AFAWA’s three-pronged approach to holistically addressing the $42 billion financing gap between women and male entrepreneurs.
The first AFAWA pillar aims to increase access to finance for women through innovative and tailored financial instruments, including guarantee mechanisms to back up women entrepreneurs.
In collaboration with strategic partners, the second pillar focuses on providing capacity-building services to women entrepreneurs, including access to mentoring and entrepreneurship training courses. AFAWA also helps financial institutions address the specific needs of women-owned/led businesses through tailored financial and non-financial products.
The third pillar concentrates on improving the business environment for women by engaging in policy dialogue with central banks and other relevant authorities and stakeholders.
Lastly, the We-Fi funding will reinforce initiatives of the Bank and partners, such as UN Women and CARE International, in favor of women entrepreneurs in various sectors that are frequently overlooked by traditional financiers, donors and governments. These special initiatives include Fashionomics Africa and the African women tech entrepreneurs program.
A Sierra Rutile Special Taskforce, set up by government to investigate the disparities between the Sierra Rutile Mining Company and the workers union, has called at State House to present its findings and recommendations to His Excellency President Julius Maada Bio.
Chairman
of the Taskforce, Julius Partai, said it was a pleasure to serve the government
and the people of Sierra Leone through the independent taskforce that investigated
the incident that occurred at Sierra Rutile a few months ago. He said the
investigation was a collective responsibility and noted the he was happy with the
support he received from the community people, the police and the Republic of
Sierra Leone Armed Forces.
Mr
Partai said their meeting with the President was to present the report, which
had cost them sleepless nights, adding that the findings and recommendations in
it were well detailed and done with all levels of fairness and integrity. He stated
that they were aware of how important the mining sector was, especially in
boosting the local economy through payment of taxes and creation of jobs for
citizens.
“There
are a lot of issues in the report which need the urgent attention of government
and we are ready to work with the government to ensure that government benefits
from its natural resources. We know that since minerals were discovered in the
country our communities have been plagued by a series of issues and sometimes
the expectations, in terms of what we should be getting as communities from the
mining companies, have not been met.
“Like
you know, there are a lot of issues in these communities that needed urgent
attention from government and it is our pleasure, based on all those evidence collected
and based on all the inputs we have collected from all stakeholders, that this
report has been conducted to the best of our knowledge and ability. The next
stage, we look forward to the leadership to ensure that the vision of the New Direction
is accomplished,” he urged.
On
his part, President Bio thanked the team for taking their time to perform to
the best of their abilities. He said the nation was trying to regularise a lot
of things and that as a government, they were bound to strike the balance to
ensure that there was a conducive environment that encouraged investors to
operate as well as making sure that the rights of citizens were protected.
He
recalled that the issues were creating insecurity in the country and that was
why government had decided to intervene. He said he would look into the
findings and recommendations of the report to know the different expectations
from the company and the community and would continue to engage and dialogue
with the various stakeholders to reach a common ground.
He
said that: “We want to get this resolved as quickly as possible because we want
to move on and do not want this to drag into the momentum that we want for the economy.
We will honestly look at what is possible and try to find a middle ground and
make sure that the issues are quickly resolved.”
It could be recalled that following the workers’ unrest and strike action at the Sierra Rutile, government held meetings with all the critical stakeholders and a special taskforce was formed to do an independent investigation on the outstanding issues that precipitated the union workers’ strike. The taskforce was facilitated by the Office of the Chief Minister.
Sierra Rutile company produces high quality rutile, ilmenite and zircon from the world’s largest natural rutile deposit.
UNCTAD: Participants at the African Forum for National Trade Facilitation Committees, 2018, Addis Ababa, Ethiopia.
Better transport, logistics and foreign investment are essential to smooth the way for the African continent to reduce trade hurdles, according to the United Nations Conference on Trade and Development (UNCTAD).
“Africa faces a moment when the market access gains that have been negotiated over the past two decades can be severely eroded unless we address the challenges of trade facilitation”, said UNCTAD Secretary-General Mukhisa Kituyi on Tuesday, at the start of a three-day forum taking place at the UN Economic Commission for Africa (UNECA) in Addis Ababa, Ethiopia.
Amidst new momentum provided by March’s landmark African Continental Free Trade Agreement (AfCTA), Mr. Kituyi emphasized that Africa’s competitive labour advantage must be accompanied by quality transport hubs, more efficient cross-border goods and services movements, better port procedures and predictable logistics management.
“If Africa is going to trade with itself, we have to make sense of what main roads and railways are to be built to connect African producers and consumers,” Mr. Kituyi argued, stressing the need for well-functioning trade committees, infrastructure and investment.
The WTO calculates that current trade costs for developing countries are equivalent to a staggering 219 per cent tariff on their international trade.
According to WTO Director General Roberto Azevêdo, the reduction of trade costs with the Trade Facilitation Agreement is “striking.”
“It could add 2.7 percentage points per year to world trade growth and more than half a percentage point to world GDP [gross domestic product],” he stated. “The biggest benefits would accrue to developing countries.”
He revealed that African estimates indicate that by fully implementing the agreement, trade costs could be reduced by an average of 16.5 per cent, potentially delivering “a huge economic boost for the continent.”
This level of trade would open new opportunities for smaller businesses, especially for women-led businesses and younger entrepreneurs while enhancing transparency and reducing corruption.
African solutions
The deputy chairperson of the African Union Commission, Thomas Kwesi Quartey, stressed that the continent needs real vision to make an African common market a reality.
“To trade, you must first produce, and to be able produce and leverage science and technology in this production, you need education training and planning,” he said.
On behalf of UNECA’s Executive Secretary, Ingrid Cyimana said that Africans were doing just that by taking steps to integrate their economies using the new Free Trade Agreement and by establishing trade facilitation committees.
“Our projections show the value of intra-African trade to be between 15 to 25 per cent higher in 2040, compared to a situation with no AfCTA,” she stated.
The forum supports the WTO’s agreement, which besides boosting trade also addresses improved revenue collection and security compliance controls.
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