The Department of Trade and Industry of the African Union Commission is organizing the fourth Meeting of the Technical Working Groups (TWGs) of the CFTA from 6-17 November 2017 to consider the draft Texts of the CFTA Agreement, its Protocols and its Annexes.
The Meeting is being attended by Chief Negotiators and Trade experts from AU Member States, Trade Experts from the eight Regional Economic Communities (RECs) recognised by the AU, members of the CFTA Continental Task Force (CTF), African Development Bank (AfDB), United Nations Economic Commission for Africa (UNECA) and United Nations Conference on Trade and Development (UNCTAD).
While welcoming participants, Mr. Edet Sunday Akpan, Permanent Secretary at the Federal Ministry of Industry, Trade and Investment of the Federal Republic of Nigeria, pointed out that the CFTA is a priority agenda for the African Union Assembly.
“It is of vital importance to continue to keep in mind that the CFTA is a significant mandate to the African Union Summit. It is the hope of the leaders that significant achievements are recorded in the near future,” he said.
He reminded the Meeting that the timeline for concluding the CFTA is next month and highlighted the advantages of the establishment of the CFTA and urged participants to do all that is required to be done to finalize their work as the Technical Working Groups. “I am confident that you are up to the task,” he concluded.
In her opening remarks, Mrs. Treasure Thembisile Maphanga, Director for Trade and Industry of the African Union Commission recalled the achievements of the last Session of the CFTA Negotiating Forum in Addis Ababa, in October 2017 and expressed her appreciation for the commitment of the Member States in moving the CFTA forward.
“We have witnessed the CFTA Chief Negotiators confirming their commitment to conclude the CFTA Agreement by end of 2017. They have clearly outlined the benefits that will accrue from the establishment of the CFTA,” she underscored.
She announced that AU Ministers of Trade are expected to meet in Niamey, Niger from 1-2 December 2017 to consider the Draft Texts on the Agreement Establishing the CFTA, Protocols and annexes. The Director for Trade and Industry acknowledged that the assignment ahead of the participants is very critical to the conclusion of the CFTA Negotiations by end of this year.
Mrs Maphanga indicated that the Draft Agreement Establishing the African CFTA should be ready by end of this month together with three protocols namely the Protocol on Trade in Services, the Protocol on Trade in Goods and the Protocol on Dispute Settlement Mechanism. According to her, the Protocol on Trade in Services will have two Annexes, namely, Schedules of Commitments and Regulatory Frameworks. And the Protocol on Trade in Goods will include; Tariff Liberalization Schedules, Rules of Origin, Customs Procedures and Cooperation, Trade Facilitation, Transit and Transit Facilitation, Non-Tariff Barriers, Technical Barriers to Trade, Sanitary and phytosanitary Measures, and Trade Remedies annexes.
Before she concluded, Mrs. Treasure Maphanga emphasized that the journey before Member States is to create One Africa with One Market and One Strong Voice, in line with the AU Agenda 2063’s vision of “an integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in global arena”.
“We owe it to ourselves and future generations to create an integrated market that expands opportunity for our socio-economic progress,” she concluded.
In his speech, Amb. Chiedu Osakwe, Nigerian Chief Trade Negotiator and Director-General of Nigerian Office for Trade Negotiations (NOTN) pointed out that the Continent’s best chance to address the dual pressure of the dramatic increases in Africa’s population and associated unemployment pressures, is to create the Single Market for Trade in Goods and Services on the legal and policy framework of the African Continental Free Trade Area (CFTA).
“On the basis of the CFTA Africa can grow intra-African trade, expand investments, modernize our economies, integrate our businesses into regional and global supply chains and hence (create) more jobs for Africans,” he underlined.
He went on and quoted Professor Yemi Osinbajo, Vice-President of the Federal Republic of Nigeria who opened last week the High-Level Forum on Trade and Investment Facilitation for Development, and reaffirmed the core position that: “On the CFTA, there is no plan B for us. We absolutely must succeed!”
“The final stretch is always the hardest part. I am confident that we shall get it done. The stakes in the CFTA are very high and it is a win-win for all our countries,” he concluded.
The 8th Meeting of the Continental Free Trade Area Negotiating Forum (CFTA-NF) will kick off from 20-25 November, 2017 in Abuja, Nigeria to undertake negotiations on the text of the Agreement Establishing the CFTA, undertake negotiations on the Protocols on Trade in Goods, complete negotiations on the Protocol on Trade in Services, and conclude work on several Annexes.
“When we find researches/opinions from other publishers that might interest you, we pass them along. Below you'll find the latest opinions on how payment platforms catalyze cross border trade by DENIS KRUGER head of Sub-Sahara Africa at SWIFT. Their opinions may differ from what you read in CFTA.Now. This article first appeared in The New Times Rwanda.”
How a payments platform is driving cross-border trade, economic growth
Four years after its launch, Kenya, Tanzania, Uganda and Tanzania are benefitting from quicker and cheaper payments through the East African Payment System (EAPS). Currently serving a population of more than 150 million people; and with Burundi soon to go live on the platform, what are the driving forces behind EAPS and what impact is it having on the region?
Lack of shared rules and regulations, cross-border trade tariffs and lack of infrastructure remain major barriers to economic growth in Africa. According to the World Bank, the African market remains highly fragmented, which limits the movement of goods, services and people across borders. The United National Economic Commission for Africa has also recently highlighted the need to boost intra-African trade to deliver development across the continent and speed up Africa’s economic transformation.
While the transport of goods and services is critical for Africa’s development, enabling the movement of capital to support trade and development within Africa is equally important.
According to SWIFT data, only 12.8 per cent of commercial payments from Africa went directly to other African countries, even though the final destination of more than 20 per cent of these payments was within the continent. A large proportion was settled internationally, including 37.2 per cent in the United States. This international financial intermediation is costly, and takes time.
Pan-regional payment systems operating within harmonised legal and regulatory frameworks of regional economic areas will make intra-regional payments easier, faster and cheaper. This will help to increase cross-border trade within regional blocs such as the East African Community (EAC) or the Southern Africa Development Community (SADC).
Competitive local payment services will also help to reduce the need for international financial intermediation, thereby keeping African transactions within Africa. It will also help to increase access to financial services.
Looking beyond high value transactions, the addition of low value intra-regional payments could also extend benefits to consumers by enabling the creation of new products and services that could increase financial inclusion.
Policy-makers have recognised the role that payment systems and other infrastructures play in fostering and deepening economic development; therefore, over the last five years, many African countries have invested in their financial market infrastructures (FMIs). The World Bank too has prioritised the development of payment systems as a crucial component of its work to reduce poverty and boost prosperity.
Several pan-regional payment systems already exist, including SIRESS in SADC, which went live with the first four SADC countries in 2013, and the East African Payment System, which was established by the EAC also in 2013.
The EAC that comprise of Uganda, Kenya, the United Republic of Tanzania, Rwanda and Burundi, was established to strengthen economic, political, social and cultural integration to improve the quality of life of people in East Africa.
The EAC intends to realise this by increasing competitiveness within the region, creating value-added products, and boosting trade and investment.
To help achieve these ambitions, Kenya, Tanzania, Uganda and Rwanda implemented the multicurrency regional payment system, EAPS, which links the domestic payment systems in each country. This makes cross-border fund transfers much easier within the bloc, supporting the free movement of goods, labour and services.
The EAPS platform, launched in November 2013, is underpinned by the high value payment systems at each country’s central bank (called real time gross settlement systems) which operate on the SWIFT messaging network for safe and secure delivery of payment and settlement messages. It enables banks to make or receive cross-border payments seamlessly in their respective local currencies. A key aim was to reduce the cost of financial transactions, which would in turn help to increase the trade flows that are critical for economic growth.
Over the past four years, the members of EAPS have reaped several benefits from using the platform. The system supports all member currencies and simplifies the process of transferring funds across the borders by reducing commission and other charges. For example, previously when a Kenyan bank wanted to send funds to a bank in Tanzania, it would need to change Kenyan shillings into dollars via a foreign intermediary bank, and then into Tanzanian shillings on the other side. EAPS removes this step, allowing direct currency exchange, therefore, lowering the cost of doing business across the region.
Transaction times have also been significantly reduced. While a payment used to take up to two days, it can now take place in only a few hours.
By using SWIFT, EAPS also benefits from the highest levels of security, resiliency, standardisation and automation.
The ambition for EAPS is that it will be the platform of the future, enhancing efficiency, continuing to reduce settlement times and lower transaction costs, thereby encouraging greater levels of trade within the region and furthering economic growth.
Currently, four EAC member countries are connected to EAPS, and Burundi is scheduled to join the platform later this year. The realisation of such a large regional economic bloc has great strategic and geo-political significance.
Encompassing some of the most vibrant economies in Africa with a combined population of more than 150 million people, a land area of 1.82 million square kilometres and a combined gross domestic product of $146 billion, EAPS will play a key role in boosting the economies of the East Africa region.
Oil prices are forecast to rise to $56 a barrel in 2018 from $53 this year as a result of steadily growing demand, agreed production cuts among oil exporters and stabilizing U.S. shale oil production, while the surge in metals prices is expected to level off next year, the World Bank said on a press statement released October 26th 2017.
Prices for energy commodities – which include oil, natural gas, and coal -- are forecast to climb 4 percent in 2018 after a 28 percent leap this year, the World Bank said in its October Commodity Markets Outlook. The metals index is expected to stabilize in the coming year, after a 22 percent jump this year as a correction in iron ore prices is offset by increased prices in other base metals. Prices for agricultural commodities, including food commodities and raw materials, are anticipated to recede modestly in 2017 and edge up next year.
“Energy prices are recovering in response to steady demand and falling stocks, but much depends on whether oil producers seek to extend production cuts,” said John Baffes, Senior Economist and lead author of the Commodity Markets Outlook. “Developments in China will play an important role in the price trajectory for metals.”
The oil price forecast is a small downward revision from the April outlook and is subject to risks. Supplies from producers such as Libya, Nigeria, and Venezuela could be volatile. Members of the Organization of the Petroleum Exporting Countries (OPEC) and other producers could agree to cut production further, maintaining upward pressure on prices.
However, failure to renew the agreement could drive prices down, as could increased production from the U.S. shale oil industry. Natural gas prices are expected to rise 3 percent in 2018, while coal prices are seen retreating following a climb of nearly 30 percent in 2017. China’s environmental policies are anticipated to be a key factor determining future trends in coal markets.
Iron ore prices are forecast to tumble 10 percent in the coming year but tight supply should push up prices for base metals including lead, nickel and zinc. Downside risks to the forecast include slower-than-anticipated demand from China, or an easing of production restrictions on China’s heavy industries.
Gold prices are anticipated to ease next year on expectations of higher U.S. interest rates.
Agriculture prices are expected to edge up in 2018 due to reduced supplies, with grain and oils and meals prices rising marginally. Agricultural commodities markets are well-supplied and the stocks-to-use ratios (a measure of how well supplied markets are) of some grains are forecast to be at multi-year highs.
However, favorable weather patterns, well-supplied global food markets, and relatively low world prices do not necessarily imply ample food availability everywhere. Drought conditions that are by some accounts the worst in 60 years, have caused crops failures in parts of Ethiopia, Somalia and Kenya and led to severe food shortages. Conflicts in South Sudan, Yemen and Nigeria have driven millions of people from their homes and left millions more in need of emergency food.
The World Bank’s Commodity Markets Outlook provides detailed market analysis for major commodity groups, including energy, metals, agriculture, precious metals, and fertilizers. The report includes price forecasts to 2030 for more than 45 commodities. It also provides historical price data and supply, demand, and trade balances for most commodities.
Trade liberalization without enhanced production is a recipe for disaster, Economic Commission for Africa (ECA) Southern Africa regional director Said Adejumobi has observed.
Speaking at the official opening of the Ad-hoc Expert Group Meeting (AEGM) on “Deepening Regional Integration in Southern Africa: The Role, Prospects and Progress of the Tripartite Free Trade Area (TFTA), Mr Adejumobi said without production, trade and market liberalization is meaningless.
A developmental approach to regional integration was adopted by the TFTA anchored on three main pillars; market integration, industrial and infrastructure development.
Mr Adejumobi said the industrial pillar seeks to boost the productive capacity of member-states, promote value addition and benefication, and enhance economic diversification. The infrastructure component is aimed at easing the challenge of doing business, and allowing the free flow of goods and services.
“The TFTA (apart from the CFTA) represents the most ambitious attempt at integrating African economies in creating a free trade area for 26 African countries of 632 million people, representing 51 percent of Africa's GDP and constituted by three regional economic communities-COMESA, SADC and the EAC”, Mr. Adejumobi added.
Mr Adejumobi also noted that the TFTA provided the architecture of development that would be crucial in realizing the aspirations of Agenda 2063 and Agenda 2030.
“The TFTA, if well implemented, has the capacity to promote trade, enhance production, spur economic competition and thereby improve the quality of goods and services across the regions, encourage creativity and innovation, create more jobs, reduce poverty and ensure that nobody is left behind in the development train with better economic opportunities for all” he said.
He emphasized the need for the industrial pillar of the TFTA to promote the development of indigenous capitalist or entrepreneurial class that would increasing assume a multinational character.
He noted the need to prioritize the small and medium scale enterprises as they are usually the hubs for job and wealth creation in developing economies; and need for greater harmonization in the industrial policies of the three RECs. He further added that the SADC Industrialization Strategy and Roadmap of 2015, the COMESA Industrialization policy and EAC industrial policy agenda must all coalsce together to avoid discontinuities in the industrial focus of the three organizations and their member-states.
He also noted the need to extend the free movement for business persons in the TFTA to include all citizens of the TFTA of all the three regional blocks. He called for deconstructing of Africa's national borders which will not only make for good economics but also good social and political re-engineering of our Continent as contained in the Pan-African ideals.
Meanwhile, the Government of Zimbabwe is committed to regional integration and that its current economic blue print, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation, recognizes the importance of industrialization and trade in transforming its economy.
Secretary, Ministry of Finance and Economic Development, Willard Manungo, said regionalism is an important trend in the modern world as it contributes to the opening of markets, enhancing the development of regional value chains, and increases intra trade, stimulating economic growth and lifting people out of poverty.
He expressed confidence that Prospects and Progress of the Tripartite Free Trade Area was moving in the right direction, though at a slow pace.
Mr Manungo further noted that regional integration in Southern Africa is built on three pillars of industrial development, infrastructure development and market integration.
However, Mr Manungo noted that the region has suffered from a critical deficiency in infrastructure, particularly, regarding access to electricity, transport, information and communication technology, water and sanitation and irrigation, among others.
“To bridge the funding gap for infrastructure, the Government of Zimbabwe established a Joint venture unit housed in my Ministry to facilitate public-private partnership initiatives and is currently putting a framework to implement Special Economic Zones in pilot areas such as Bulawayo, Sunway City in Harare and Victoria Falls”, he said.
Mr Manungo said that at regional level, the Government of Zimbabwe was involved in cross border infrastructure collaboration, notable projects include; rehabilitation of the Kariba Dam Wall Governments of Zimbabwe and Zambia, jointly mobilized resources; and the opening of the One Stop Border Post at Chirundu.
He commended ECA and the Inter-Governmental Committee of Experts (ICE) for championing the agenda for deepening regional integration through trade facilitation and infrastructure development. He hoped that the deliberations were going to proffer concrete, focused and workable recommendations on developing infrastructure that would facilitate smooth trade, thereby strengthening the regional integration agenda.
Participants at the AEGM includes experts in regional integration, senior government officials and representatives of regional economic communities, research institutions, civil society organizations and the private sector, who will deliberate on the theme and identify the opportunities from enhanced integration. (UNECA ATPC)
Melaku Ezezew (Eng.), elected as the president of the Ethiopian Chamber of Commerce and Sectoral Associations (ECCSA).
On October 27, 2017, (ECCSA) has elected Melaku Ezezew (Eng.) who came from the historical town of Gonder and has got the major vote to serve the chamber for the coming two years. Melaku won the election by securing 87 votes to become the successor of Mr.Solomon Afework who refused to compete for another term, while he has a right to serve the chamber for one more term.
Other candidates include Feysa Ararsa, the outgoing board member of ECCSA and founder of Harambe University College, Fasil Tadesse, President of Textile and Garment Manufacturing Association who managed to secure only 75 and 8 votes respectively from the total 174 voters that come from regional chamber and some other sectoral associations.
Facebook has revealed that the company has launched its Nigerian SME Council, the first of its kind to launch on the continent. The council forms part of Facebook’s ongoing commitment to help support small and medium-sized businesses throughout Africa.
The Nigerian SME Council brings together Facebook Africa’s SME team and Nigerian business owners from a range of industries, in a partnership designed to provide better digital tools for business and customer growth.
The council is made up of a combination of 15 start-ups and established SMEs from a range of industries. Each person from each respective business brings with them a wealth of unique experiences in understanding and embracing digital and mobile strategies, as well as reaching the Nigerian customer, making them ideally positioned to offer support to other companies who need it.
Speaking at the launch, Abi Williams, Facebook’s SMB Sales Manager, EMEA said: “Small businesses form the backbone of most of the thriving economies in the world, driving sustainable growth and creating jobs, and those in Nigeria are no different. Facebook is strategically positioned to help SME’s grow their businesses, and with a vibrant SME sector, Nigeria was a natural choice in launching our very first SME Council on the African continent. With 35 million people in other countries connected to a Nigerian business on Facebook, the global market has never been closer for Nigerian SMEs.” (ITNewsAfrica)
Dubai will this November host African heads of State and business leaders at a forum to discuss the continent’s economic outlook and investment opportunities for countries in the United Arab Emirates (UAE).
The conference, which will take place on November 1 and 2, 2017, will host five African heads of state and 12 ministers.
It will also host more than 1,000 top-level government and corporate decision-makers and industry experts. The event will be held at Dubai’s Madinat Jumeirah.
The event is being hosted by the Dubai Chamber of Commerce and Industry.
Hamad Buamim, President and CEO of the Dubai Chamber of Commerce and Industry said that with the Global Business Forum series, Dubai has managed to offer a global platform, allowing top officials, decision-makers and investors to explore the prospects of economic partnership and cooperation among international markets.
The Dubai emirate is now becoming a magnet for African business.
East Africa will be represented by Rwanda’s Paul Kagame and Uganda’s Yoweri Museveni. “The Global Business Forum on Africa, which is set for an unprecedented top-tier attendance, including distinguished African heads of state and ministers, is testament to Dubai’s firm position on the global economic map,” Mr Buamim said.
The Global Business Forum series was launched by the Dubai Chamber of Commerce and Industry in 2012, and focuses on Africa, the Commonwealth of Independent States and Latin America. (Standard Digital Kenya)