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Wednesday, Sep 17th, 2014

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Intra-Africa trade: Going beyond political commitments

Progress will come when agreements are implemented

Note to editor: With trade within Africa at just about 11%, experts are calling on the continent’s leaders to implement the right policies to boost intra-Africa trade. Africa Renewal’s Masimba Tafirenyika explores the obstacles to trade within the continent and identifies what needs to be done to turn the situation around.

By Masimba Tafirenyika

August 24, 2014 (SSNA) -- Among Africa’s policy wonks, underperforming trade across the continent within the region is a favoured subject. To unravel the puzzle, they reel off facts and figures at conferences and workshops, pinpoint trade hurdles to overcome and point to the vast opportunities that lie ahead if only African countries could integrate their economies. It’s an interesting debate but with little to show for it until now.

The problem is partly the mismatch between the high political ambitions African leaders hold and the harsh economic realities they face. Case in point: they have set up no less than 14 trading blocs to pursue regional integration. Yet they have shown “a distinct reluctance to empower these institutions, citing loss of sovereignty and policy space as key concerns,”  says Trudi Hartzenberg, executive director at the Trade Law Centre (TRALAC) for Southern Africa, an organization that trains people on trade issues.  As a result of this reluctance, she says, “Regional institutions remain weak, performing mainly administrative functions.”

Trade flourishes when countries produce what their trading partners are eager to buy. With a few exceptions, this is not yet the case with Africa. It produces what it doesn’t consume and consume what it doesn’t produce. It’s a weakness that often frustrates policy makers; it complicates regional integration and is a primary reason for the low intra-regional trade, which is between 10% and 12% of Africa’s total trade. Comparable figures are 40% in North America and roughly 60% in Western Europe. Over 80% of Africa’s exports are shipped overseas, mainly to the European Union (EU), China and the US. If you throw into the mix complex and often conflicting trade rules, cross-border restrictions and poor transport networks, it’s hardly surprising that the level of intra-Africa trade has barely moved the needle over the past few decades.

Not everybody agrees intra-Africa trade is that low. Some experts argue that a big chunk of the continent’s trade is conducted informally and at times across porous borders. Most borders, they point out, are often poorly managed or informal trade statistics are simply not included in the official flows recorded by customs officials. “We don’t have a way of capturing these types of activities because they’re informal,” said Carlos Lopes, the head of the UN Economic Commission for Africa, in an interview with Africa Renewal. The ECA, he explained, is planning to plug this information gap with a more precise picture of economic activities in Africa and give economic planners a better data set with which to work.

Regional economic blocs

To accelerate regional integration, the World Bank is advising African leaders to expand access to trade finance and reduce behind-the-border trade restrictions such as excessive regulations and weak legal systems. Nevertheless, saddled with weak economies, small domestic markets and 16 landlocked countries, governments believe they can achieve economic integration by starting at the regional level and working their way up, merging all the regional trading blocs into an African Free Trade Area. But with 14 different trading blocs, critics say that’s just too many. Some blocs have overlapping members and many countries belong to multiple blocs.

Yet, the challenge is not simply the number of trading blocs, experts say, but their track record. Governments need to implement their trade agreements. On this score, African countries perform poorly despite their strong political commitment to regional integration, notes Ms. Hartzenberg in her report, Regional Integration in Africa, published by the World Trade Organization, a global body on trade rules.

“In some cases, the challenge is that there may still not be a clear commitment to rules-based governance in African integration; [not] taking obligations that are undertaken in international agreements seriously,” says Hartzenberg in an email responding to questions from Africa Renewal. “Some argue that [African governments] need policy space to address the development challenges they face – but this does appear inconsistent with the signing of many regional agreements.” Lack of capacity to implement their obligations, she adds, is also to blame.

The African Development Bank (AfDB) shares this view. Its analysis of regional integration and intra-trade in Africa imputed slow progress to “a complex architecture of regional economic communities”. While this arrangement has yielded positive steps towards common regional targets, says the bank, “progress has been disappointing.”

Ms. Hartzenberg gave the example of the 15-member Southern African Development Community (SADC), a regional economic group, which launched a Free Trade Area in 2008. Despite SADC’s decision to remove trade restrictions, she says, some countries have not eliminated tariffs as stipulated by the agreement. Worse still, in some cases countries that removed the tariffs have since reinstated them.

To be fair, the SADC Trade Protocol has a provision that allows exemptions from phasing out tariffs. Some countries have applied for such exemptions, the TRALAC executive director said, but others have simply reintroduced the tariffs or alternative instruments such as domestic taxes. “This can be argued to demonstrate a lack of political will to implement agreed obligations. It could well be that some member states recognise belatedly the implications of the agreement they have signed and no longer want to be bound by these obligations.”

Poor infrastructure

Lack of progress in implementing agreement along with the absence of reliable transport, energy and information and technology infrastructure make the journey towards regional integration long and arduous. “Road freight moves incredibly slowly, while major ports are choked for lack of capacity,” observes the AfDB.

Even with the current gains Africa is making in upgrading regional infrastructure, Ibrahim Mayaki, the head of the New Partnership for Africa’s Development (NEPAD), the African Union’s development arm, finds the continent still faces serious infrastructure shortcomings across all sectors, both in terms of access and quality. NEPAD has just completed a 30-year plan that focuses on regional trans-border projects like the 4,500-km highway from Algiers in Algeria to Lagos, Nigeria.

Africa requires huge investments to develop, upgrade and maintain its infrastructure. The AfDB estimates the region would need to spend an additional $40 billion a year on infrastructure to address not only current weaknesses but also to keep pace with economic growth.

Sophisticated protectionism versus EPAs

Many of the trade deals Africa signs with its partners ignore the continent’s efforts to promote intra-Africa trade, according to trade analysts. Nick Dearden, a former director of the Jubilee Debt Campaign and now with World Development Movement, a global advocacy group on poverty, accuses the West of pushing for free trade models that benefit their interests, not Africa’s. He complains that many African countries are “locked into trade agreements which keep them dependent on one or two commodities.”

Writing on his blog hosted by The Guardian, Mr. Dearden says the EU is attempting to foist Economic Partnership Agreements [EPAs] on African countries. EPAs require EU trading partners to lower their tariffs on imports and exports on a reciprocal basis. Mr. Dearden warns that EPAs thwart Africa’s integration efforts and he instead advises African leaders to follow South Korea’s example of using a “range of government interventions” to boost trade. These include, among others, protecting industries, controlling food production and banking, and passing strong regulations to ensure people benefit from trade and investment.

Mr. Lopes of the ECA makes the same point. “Protection is not a bad word,” he asserts. He favours what he calls “sophisticated protectionism” but cautions African leaders to “do it with sophistication, which means you need to strike the right balance.” The ECA boss views sophisticated or smart protectionism not as a choice between state and market as if  they “were two opposites.” His argument is that there cannot be industrialization without some form of smart protectionism; and without industrialization, Africa’s efforts to integrate its economies and increase intra-region trade are less likely to succeed. Free trade enthusiasts, however, argue that protectionist policies could shrink the size of the global economy, create few winners and leave everybody worse off.

Beyond commitments

There is much that African countries need to do to increase intra-regional trade. For instance, they need to reduce dependence on commodities by expanding the services sector, including telecommunications, transport, educational and financial. They need to increase investments in infrastructure. And they need to eliminate or significantly reduce non-tariff barriers that are major roadblocks to intra-African trade. The list of non-tariff barriers is as long as it is comprehensive, ranging from prohibitive transaction costs to complex immigration procedures, limited capacity of border officials and costly import and export licensing procedures. For this to happen, it will take much more than political commitments; it will require practical steps on the ground even if they come with some costs.

Africa Renewal

Stop Bombing Our Hospitals!

By Eric Reeves

August 23, 2014 (SSNA) -- It is a terrible sign of the desperation on the part of the people of the Nuba Mountains in South Kordofan, Sudan. Compelled by three years of unrelenting, indiscriminate, and massively destructive bombing by Khartoum's air force, the people of the Nuba have been driven to plead with these simple photos.  But for all their simplicity, they should be shocking: where else in the world, other than Sudan, are hospital, schools, churches, and mosques regularly targeted for attack?  These attacks are carried out for the most part by Antonov "bombers," highly inaccurate retrofitted Russian cargo planes. They are entirely without the accuracy required for military purposes; they are tasked with sowing civilian destruction and terror.  They have largely destroyed the agricultural economy of the Nuba and over a million people have been displaced or are in acute need of humanitarian assistance.

And still the world will not act to compel Khartoum to halt this savage campaign.  Look carefully at these photographs and imagine yourself among these people.  What would you find acceptable as an explanation of international inaction in the face of your pleas?

Concerted economic pressure by the United States and the countries of the European Union could halt Khartoum's bombing quickly. Why aren't these pressures being exerted?

Eric Reeves' new book-length study of greater Sudan (Compromising With Evil: An archival history of greater Sudan, 2007 - 2012; www.CompromisingWithEvil.org; review commentary at: http://wp.me/p45rOG-15S)

Why Kiir can only be ousted!!

In the end, we will remember not the words of our enemy, but the silence of our friend,” Dr. Martin Luther King, Jr.

By Luk Kuth Dak

August 23, 2014 (SSNA) -- Any writer or a columnist will tell you that when one stops writing for a while, it becomes an uphill battle to resume it again. Indeed, for the past few weeks, my column disappeared. During that time, I was a father and mother for my 12-year-old daughter, Mirry Dak, who was spending part of her summer vacation with (daddy) in Atlanta. As you can imagine, nothing was off the table, from swim lessons, shopping, and many, many other countless activities. When I finally came home at night, I was often too exhausted to do anything else, much less writing.

But more of that doesn’t concern you. I just wanted to point out that parenting can be a very fulfilling experience and, the time Mirry and I spent together, meant the world for both of us.

But as Dr. Martin Luther King, Jr. once told his listeners: “We have some difficult days ahead.” If you are a South Sudanese, you should worry, rightly so, about the direction our country is headed to with one of the most corrupt, most murderous, and most ethnically divisive dictator, Salva Kiir Mayardit at the helm.

And yes, we have some difficult days ahead!

As a principle, the solemn duty of a good journalist is to educate the masses about their rights, and to be a watchdog on the government activities that affect their daily lives. I hope I have done that in the past and, I have no intention to call it quits, right now. As a result, I wanted to join in the never-ending debate among pundits, experts, politicians and journalists alike, on whether or not the disgraced dictator, Mr. Salva Kirr Mayardit, will put the nation that he once fought to liberate first, and step aside in favor of a formation of government of national unity.

Well, as eager as I was, I reached out to some influential intellectuals all across the board, but especially in the Jieeng (Dinka) Nation, some of whom were my colleagues or bosses during my career as a reporter and a broadcasting journalist in Juba. Unfortunately, I soon found out that in all truth, there actually was no such constructive and healthy debate to be had, simply because the elite Jieeng intellectuals have- blindly- chosen to bestow their unconditional support behind Mr. Kiir, based entirely on his ethnic background, not his ideology or performance.

Amazing!

But for the optimists, those good-willed folks among South Sudanese, who continue to believe in the possibility that a miracle might come for Mr. Kiir to step aside in order to save the nation, I have some really, really bad news for all of us! The fact is, most-if-not all-dictators, do not relinquish power voluntarily. It’s just not in their “DNA” or the way in which they operate.

Additionally, most dictators have several characteristics in common. They usually rule autocracies government with a single leader and no governing body to check his power. Often dictators have totalitarian regimes, keeping their power through control of the mass media, use secret police and spy on the citizens of their state as well as restrict or completely remove their freedoms. Many of these dictators foster cults of personality, a form of a hero worship in which the masses are fed propaganda declaring their leader to flawless, almost divine!

Worse, all dictators are corrupt because of the unlimited power they wield. They are never answerable for their actions to anyone, accept themselves. They all put relatives and close associates and their inner circle of trusted people to vital positions in the government (military, intelligence, police, industry, etc.) they all govern repressive regimes where human right is virtually non-existent. More importantly, dictators never relinquish power; it had to be taken from.

Subsequently, South Sudan disgraced President; Mr. Salva Kiir Mayardit will not be an exception in this league of dictators. In very many occasions, he made his intentions crystal clear that, he’s in no hurry to give-up power against the will of the citizens, even if it means wiping out the entire population, as it was the case with the Nuer genocide. In his murderous mind, as long as there’s still room for some more blood to be spilled around in order to quench his thirst, there’s a zero chance for him to relinquish power on his own terms.

There is no question that Kiir’s tenure in office has been a total disaster for the young nation. The despaired, traumatized and heart-broken citizens are totally fed up with his tribal regime that, they won’t even want to cross the street with him, much less having him as their leader.

If he’s not kicked out, he will continue doing what only Mr. Kiir does best, turn the nation into a morgue, for the remainder of the Nuer and other tribes except, of course, his well- protected Jieeng ruling kingdom.

The nation is crying for a new leadership!

The founding father of the Sudan People’s Liberation Movement, SPLM/A, the late Dr. John Garang de Mabior was well known for putting others above himself. If he were faced with a similar situation as Kiir is, he would have not hesitated to do what Nouri al-Maliky has done to resign for the sake of the unity of his country, Iraq and its people.

The Iraq’s Prime minister for the past eight years relinquished the post to his nominated replacement, ending a political deadlock. Standing alongside Haider al-Abadi, al-Maliki said: “I am stepping aside in favor of my brother, in order to facilitate the political process and government formation.”

Al-Maliki said the decision to back al-Abadi reflected his desire to “safeguard the high interest of the country,” adding that he would not be the cause of any bloodshed.

Mr. Kiir, who’s  growing increasingly isolated as he was deserted not only by his closest allies in Khartoum, Nairobi, Addis Abba, Kampala, but most importantly, Washington, should know that he has a very little time left to hang on to power.

But, no!

His compulsive desire to destroy the nation is far too powerful to overcome. Therefore, if (you) the people of South Sudan want the bloodshed to continue, Mr. Kiir’s your man. But, if you want peace, stability, democracy and progress, the option is clear!!

Luk Kuth Dak can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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