Inter Press Service » Trade and poverty: Facts beyond theory http://www.ipsnews.net Turning the World Downside Up Fri, 28 Nov 2014 08:19:49 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.3 Middle-Income Kenya Still in Need of Aidhttp://www.ipsnews.net/2014/11/middle-income-kenya-still-in-need-of-aid/?utm_source=rss&utm_medium=rss&utm_campaign=middle-income-kenya-still-in-need-of-aid http://www.ipsnews.net/2014/11/middle-income-kenya-still-in-need-of-aid/#comments Tue, 04 Nov 2014 08:40:00 +0000 Miriam Gathigah http://www.ipsnews.net/?p=137567 Gabriel Kimwaki on his coffee farm in Nyeri County, central Kenya. Agriculture is still the backbone of the economy even when many small-scale farmers continue to receive minimal returns. Credit: Miriam Gathigah/IPS

Gabriel Kimwaki on his coffee farm in Nyeri County, central Kenya. Agriculture is still the backbone of the economy even when many small-scale farmers continue to receive minimal returns. Credit: Miriam Gathigah/IPS

By Miriam Gathigah
NAIROBI, Nov 4 2014 (IPS)

Coffee farmer Gabriel Kimwaki from Nyeri County, in central Kenya, is considering “giving up farming altogether”.

He told IPS that the returns are too low “and with every harvesting season, I am making less and less profit.”

His is not a unique story. Francis Njuguna, an agricultural extension officer in the area, told IPS that while it is still difficult to quantify, “more farmers are shifting to food crops. The cash crop business is proving to be too risky for small-scale farmers.”

Kenya was reclassified as a middle-income country in early October, but as this East African comes to terms with its new ranking, it is becoming clear that status alone will not result in fewer people going to sleep hungry.

There is still a great need to address the plight of Kenya’s poor, as agriculture remains the backbone of the economy.

According to the Kenya National Bureau of Statistics, based on a five-year average from 2009 to 2013, the agricultural sector’s contribution to the GDP is now estimated at 25.4 percent — up from 24.1 percent.

The contribution that small-scale farmers like Kimwaki make cannot be overemphasised with government statistics showing that small-scale production accounts for at least 75 percent of the total agricultural output and 70 percent of marketed agricultural produce.

Economic analyst Jason Braganza told IPS that “the move to middle-income status was as a result of using better data from high-performing sectors.”

The sectors include agriculture, telecommunication, real estate and manufacturing — the latter sector’s contribution to GDP has risen from 9.5 percent to 11.3 percent, according to Braganza.

What the revised GDP revealed, Braganza said, “is that the country is worth much more than what was previously recorded.”

The country’s GDP is now estimated at 53.4 billion dollars compared to 42.6 billion dollars before the revision, making Kenya the ninth-largest economy in Africa, up from the 12th position.

Kenya’s gross national income rose to 1,160 dollars, up from an estimated 840 dollars before the revision. According to the World Bank, a country is classified as middle income if its gross national income per capita — a nation’s GDP plus net income received from overseas — surpasses 1,036 dollars.

While this has been hailed as a move in the right direction for a country that remains East Africa’s strongest economy, policy analyst Ted Ndebu told IPS that this does not mean that Kenya is “rich and that it has risen above its social economic challenges.”

World Bank statistics show that more than four out of 10 Kenyans live in poverty. The country has a population of 44.3 million. With an economic growth rate of 5.7 percent, Ndebu said that the country “is still a long way off from a double-digit growth rate of at least 10 percent as outlined in the Vision 2030, the country’s economic blueprint.”

Braganza explained that revising the GDP or rebasing the economy is a purely “statistical exercise. It provides a better understanding of the economy but in itself, it does not change people’s poverty status.”

But he added that based on the new statistics, “the government has a better understanding of which sectors are driving the growth of the economy. But it does not mean that fewer people are sleeping hungry.”

He said that economic growth alone would not eliminate poverty.

“Growth must be accompanied by development. It is development that reduces poverty because it addresses issues like access to education, health services, jobs and so on,” Braganza said.

He explained that there were many factors that were not captured in statistics and income bracketing is not always a true representation of the people’s well being. “That is why household surveys are important. They show you the conditions under which people are living.”

Braganza added that this did not mean that rebasing the economy was not important. “It is very significant because the findings can be used to boost development and improve people’s living standards.”

The government would also be able to see which sectors can potentially bring in revenue, and tax them accordingly, thereby exploiting the potential that each sector has to the fullest.

But Ndebu said this could have a downside effect if the sectors are taxed too heavily and could discourage investment and innovation particularly in the telecommunication industry which pioneered mobile payments technology.

But this is not the only implication. Kenya could also be overlooked by donors.

Jason Lakin, the country manager at International Budget Partnership Kenya, told IPS that donors have in recent years focused on the poorest countries and a middle-income country may not be prioritised for funding.

He said that low-income countries generally qualify for more generous assistance.

“Take the World Bank’s International Development Association (IDA) credits, which are loans given to countries on very concessional terms [low interest and long repayment periods]. Middle-income countries will not qualify for these terms,” he explained, adding that middle-income countries may still get loans at  higher rates or over shorter repayment periods.

“Kenya may not find donor financing as attractive when the interest rates are higher and repayment periods shorter because it has now shown that it can borrow internationally,” said Lakin.

While market rate borrowing may still have higher rates than donor financing, experts say that donor funding usually has other conditions, making it less attractive for a country with other options.

Lakin said that international bond markets for instance “only want to be repaid and do not impose any conditions.”

Although Kenya is not an aid-dependent country since aid accounts for only seven to 10 percent of the national budget, Braganza said that “we still cannot undermine the importance of [aid] because it finances key sectors such as health, agriculture and education.”

“Donor aid is very significant because it is used in social sectors where people are in very severe poverty conditions,” he said.

Ndebu added that there was also aid that does not go through the national budget but through non-government organisations, which significantly complemented government projects.

Edited by: Nalisha Adams

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Ethiopian Scribes Try to Preserve Dying 4th Century Arthttp://www.ipsnews.net/2014/05/ancient-art-died-across-world-meet-ethiopian-scribes-preserving/?utm_source=rss&utm_medium=rss&utm_campaign=ancient-art-died-across-world-meet-ethiopian-scribes-preserving http://www.ipsnews.net/2014/05/ancient-art-died-across-world-meet-ethiopian-scribes-preserving/#comments Thu, 08 May 2014 09:44:10 +0000 James Jeffrey http://www.ipsnews.net/?p=134172 The ika bet (treasury), in which manuscripts are stored, of Debre Damo monastery, located far to the north of Ethiopia. Credit: James Jeffrey/IPS

The ika bet (treasury), in which manuscripts are stored, of Debre Damo monastery, located far to the north of Ethiopia. Credit: James Jeffrey/IPS

By James Jeffrey
DEBRE LIBANOS, Ethiopia, May 8 2014 (IPS)

Misganew Andeurgay changes his bamboo-made pen for another, dips it in a tiny pot of viscous liquid and, on a parchment page filled with black script, begins to trace in scarlet-red ink the Amharic word for god. 

For centuries Ethiopian scribes like Misganew have written holy texts in manuscripts made out of leather and with worshipful respect, inscribing on them holy names in red ink.

“It is a difficult job but I like it,” 50-year-old Misganew, who has taught and practised the craft of writing Amharic calligraphy for 21 years, tells IPS. He adds that sitting on the floor for hours on end as he writes is hard on his knees and legs.

He travelled 700km from Gondar in northern Ethiopia to work at Debre Libanos, 100km north of Addis Ababa, because here leather is more accessible and he can make more money. His family, including his five children, wait for him in Gondar.

Misganew Andeurgay, 50, copying a religious text onto parchment at Debre Libanos, 100km north of Addis Ababa, Ethiopia. Credit: James Jeffrey/IPS

Misganew Andeurgay, 50, copying a religious text onto parchment at Debre Libanos, 100km north of Addis Ababa, Ethiopia. Credit: James Jeffrey/IPS

But concerns are mounting that Ethiopia’s manuscript tradition and the many livelihoods and skills associated with it — such as calligraphy, parchment production, book binding, and illustration arts — are under threat.

Ethiopia’s growing economy has achieved an average 10 percent growth since 2004. This is set to continue in the coming years with a somewhat reduced but still high eight percent growth rate. Although the story of this Horn of Africa nation’s economy is heartening in appearance, it is hardly a story of a rising tide of prosperity that has lifted all people along with it.“We need to promote the skills in a modern way and make them useful for contemporary life.” -- Hasen Said, chief curator of the Ethnological Museum in Addis Ababa.

Scribes, for example, have been adversely affected by the country’s burgeoning leather industry. In 2011, total shipments of leather and leather products generated 2.8 billion dollars and by 2020 that figure could increase by another four billion dollars, according to the Ethiopian Ministry of Industry. But this seemingly positive trend has driven up the price of leather, the raw material on which scribes depend.

Manuscript making is becoming increasingly expensive while already being immensely time consuming compared to the printed press. Because of this, parchment manuscript production in Ethiopia is declining, says John Mellors, an Ethiophile and independent researcher who has visited Ethiopia regularly since 1995.

“Another problem is that scribes are increasingly struggling to find patrons who traditionally have bought books for churches or themselves,” Mellors tells IPS.

Many people in larger towns assume parchment books stopped being made many years ago and so wouldn’t even consider commissioning a book to be made, he explains.

Misganew works for about 12 hours a day as he slowly and steadily traces graceful Amharic characters along faint grooves etched into the parchment.

By the end of the month he can usually produce a book of at least 32 pages, which could sell for about 3,000 birr (157 dollars) — if he can secure a customer.

A young novice monk at Debre Damo monastery in the Tigrai region far to the north of Ethiopia, close to Eritrea. For hundreds of years monks preserved Christianity and its influence on Ethiopia’s parchment manuscript tradition. Credit: James Jeffrey/IPS

A young novice monk at Debre Damo monastery in the Tigrai region far to the north of Ethiopia, close to Eritrea. For hundreds of years monks preserved Christianity and its influence on Ethiopia’s parchment manuscript tradition. Credit: James Jeffrey/IPS

But in general, scribes’ average earnings are now so low that it is putting off a new generation from taking up the craft, further endangering the manuscript tradition, Mellors says.

It is generally agreed that the origin of parchment making found in Ethiopia today likely lies with Christian monks who braved crossing the Red Sea around the 4th century and brought the bible with them.

“These texts were subsequently copied by scribes onto parchment using techniques that appear to have changed very little up until the present day,” Mellors says.

Methods exist in Ethiopia that have not been used in European parchment production for over a thousand years, Richard Pankhurst, a renowned authority on Ethiopian manuscript illustration, tells IPS.

“This makes Ethiopia unique in keeping the tradition so far into the modern age,” Pankhurst adds.

Although how much longer it can survive in these modern times is the question at stake.

“The basic method for making parchment manuscripts in Ethiopia should survive as it’s reasonably well documented already,” Mellors says.

While British leather manufacturer Pittards, which has sourced leather from Ethiopia for nearly 100 years, announced that it wants to give something back by helping protect the country’s ancient parchment manuscript-making tradition and the skills associated with it, concerns remain.

“We don’t want to end up with just iPads,” Hasen Said, chief curator of the Ethnological Museum in Addis Ababa, tells IPS. “We need to promote [manuscript] skills in a modern way and make them useful for contemporary life.”

New technologies as well as older forms can coexist in a country like Ethiopia that has a rich history while becoming more of a global nation, Hasen argues.

Medhane Alem Adi Kasho, a rock-hewn church found in the Tigrai region of northern Ethiopia and in which some of Ethiopia's precious ancient artefacts such as parchment manuscripts are stored. Credit: James Jeffrey/IPS

Medhane Alem Adi Kasho, a rock-hewn church found in the Tigrai region of northern Ethiopia and in which some of Ethiopia’s precious ancient artefacts such as parchment manuscripts are stored. Credit: James Jeffrey/IPS

The medieval monastery at Debre Libanos, which houses the last school for apprentice scribes, is a source of some hope that the tradition of parchment manuscript production will survive, Hasen says.

When IPS visited the monastery all the students were yet to return from their Easter break. The monk IPS talked to was reluctant to be drawn into a conversation about how student numbers were faring, and suggested that such matters were best left in god’s care.

But many national treasures are poorly looked after due to the lack of adequate space and resources available for storage and restoration, according to the Society of Friends of the Institute of Ethiopian Studies.

Throughout Ethiopia’s long history, Ethiopia has had to contend with silver crosses made from Maria Theresa dollars, crowns, ornate incense burners, precious religious icons and the like being taken out of the country illegally.

The monk IPS spoke with was quick to point out that the hundreds of manuscripts looted by the British Army after the Makdela Expedition in 1868 still reside in the United Kingdom.

Judging by the evidence, it will likely take more than strong faith if Ethiopia’s manuscripts, associated traditions and other artefacts are to survive.


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DR Congo’s Red Light to Inventionhttp://www.ipsnews.net/2014/04/dr-congos-red-light-invention/?utm_source=rss&utm_medium=rss&utm_campaign=dr-congos-red-light-invention http://www.ipsnews.net/2014/04/dr-congos-red-light-invention/#comments Wed, 30 Apr 2014 17:18:31 +0000 Taylor Toeka Kakala http://www.ipsnews.net/?p=134001 Thérèse Izayi, a Congolese engineer, invented two very unusual traffic robots. This one is situated at an intersection on Triumphal boulevard, near parliament in Kinshasa, the Democratic Republic of Congo’s capital. Credit: Taylor Toeka Kakala/IPS

Thérèse Izayi, a Congolese engineer, invented two very unusual traffic robots. This one is situated at an intersection on Triumphal boulevard, near parliament in Kinshasa, the Democratic Republic of Congo’s capital. Credit: Taylor Toeka Kakala/IPS

By Taylor Toeka Kakala
GOMA, DR Congo, Apr 30 2014 (IPS)

“There are several robots in the world, but that one which regulates traffic is made in Congo,” Thérèse Izayi, a female engineer and the Congolese inventor of two very unusual traffic signals, tells IPS.

Situated at an intersection on Triumphal Boulevard, near the Democratic Republic of Congo’s parliament in the capital, Kinshasa, the 2.5-metre traffic signal looks like an actual robot — with arms, legs, a chest and a head.

The breastplate pivots as the lights on it change from green to red. Then, it raises its arm to stop the traffic on one road, allowing vehicles from another to pass. The talking robot — it speaks both French and the local Lingala language — instructs: “Drivers, you can leave the road to pedestrians.”

It is made from aluminium to withstand high temperatures and humidity, and the heavy rains of this equatorial climate. There are cameras by its eyes and on its shoulders, which continuously film the traffic. It is also solar-powered to ensure its independence from electricity.

This robot is now a part of everyday life here and there is a second one on Lumumba Boulevard — en route to the international airport. Both are locally patented by Women Technology, an NGO that Izayi founded to give women engineers a platform.

“The robot captures images, which it sends using the antenna on his head to the [Women Technology] centre that stores the data. It is also equipped with an automatic detection system that tells it that pedestrians want to cross,” Izayi explains.

Izayi says that the recorded film could be sent to the traffic police, to allow authorities to prosecute drivers who have committed traffic offences.

Thérèse Izayi’s robot is situated at an intersection on Triumphal boulevard, near parliament in Kinshasa, the Democratic Republic of Congo’s capital. Credit: Taylor Toeka Kakala/IPS

Thérèse Izayi’s robot is situated at an intersection on Triumphal boulevard, near parliament in Kinshasa, the Democratic Republic of Congo’s capital. Credit: Taylor Toeka Kakala/IPS

Kinshasa is a city where traffic lights are almost non-existent and the Highway Code is constantly violated. The capital city, with a population of  10 million, is known for its chaotic traffic.

“The robot just solved the problem of corrupt policemen,” a taxi driver tells IPS.

Traffic police, who earn small salaries, are often accused of extorting money from divers. They allegedly do this by stopping cars in the middle of the road to demand bribes, which results in constant traffic jams.

“Traffic jams are often linked to police harassment more than traffic density,” Val Manga, president of the National Road Safety Commission, known by its French acronym, CNPR, tells IPS. The robots on Lumumba and Triumphal ensure quick stops and no policemen.

According to CNPR, there are around 400,000 vehicles on Kinshasa’s roads. But of the total number of vehicles in the country, only five percent are new.

Each month, around 40 people are killed in accidents in Kinshasa, and 90 percent of these accidents are attributed to drivers’ faults.

Izayi dreams of being able to sell more robots and create manufacturing jobs throughout the country. She hopes that she will be able to market her robot internationally but points out that she is restricted by the country’s lax enforcement of laws, corruption and a very slow administrative system.

Izayi has tried numerous times to convince the government to support her project and still has not had much luck.

Obtaining a patent is a difficult process here. The costs vary and it takes six to 12 months to get approval.

Zacharie Kambale is a local inventor who has not been able to register a patent for his idea because he does not have the money for bribes.

“I have to pay money informally to officials to get things done,” Kambale tells IPS.

In 2012, Kambale developed Kongo Connect, a social network that is based in Goma. It has been nicknamed the “African Facebook”, and Kambale says it has more than 100,000 users.  The site is currently down as Kambale adds more functions to it.

Congolese economist Batamba Balembu tells IPS that he estimates four out of five companies in DRC have had to “give gifts” to get a business licence. He says that 55 percent of government revenue is lost to corruption.

There is also no enforcement of legislation relating to copyright protection here, says Chrysostome Kwede, a patent lawyer in Kisangani in northeastern DRC.

According to the World Intellectual Property Organisation (WIPO), legislation concerning industrial property was enacted here in 1982. Four year later, laws were put in place with regard to literary and artistic works.

However, WIPO says while there is legislation “from 1982 to date [1982 for industrial property and 1986 for literary and artistic works], legislative action in the DRC concerning both areas has stopped.”

“The legal vacuum is the basis of corruption in the Ministry of Industry,” Kwede tells IPS.

But government spokesperson Lambert Mende has told the media “the government’s view is very positive. But the administrative procedures [to purchase the robots] are very heavy.”

However, Izayi says interest has been expressed by the governments of Angola and neighbouring Congo-Brazzaville.

“But I am not ready to provide them with prototypes like those in Kinshasa because it is expensive,” Izayi adds.

The robots are expensive — around 15,000 dollars  — and they cost about 2,000 dollars a month to maintain.

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Ethiopia’s Female Fashion Designers Embrace Tradition to Boost Saleshttp://www.ipsnews.net/2014/03/ethiopians-female-fashion-designers-embrace-tradition-boost-business/?utm_source=rss&utm_medium=rss&utm_campaign=ethiopians-female-fashion-designers-embrace-tradition-boost-business http://www.ipsnews.net/2014/03/ethiopians-female-fashion-designers-embrace-tradition-boost-business/#comments Thu, 20 Mar 2014 13:58:58 +0000 James Jeffrey http://www.ipsnews.net/?p=133101 A model wearing YeFikir clothing. Growing international recognition for designers in Ethiopia and Africa is partly a result of growing demand for ethically-produced fashion designs. Credit: Kyle La Mere/IPS

A model wearing YeFikir clothing. Growing international recognition for designers in Ethiopia and Africa is partly a result of growing demand for ethically-produced fashion designs. Credit: Kyle La Mere/IPS

By James Jeffrey
ADDIS ABABA, Mar 20 2014 (IPS)

Female fashion designers are drawing on Ethiopia’s rich cultural heritage and adding a modern twist to find success at home and increasingly impress abroad. 

In fact, fashion design is proving to be one of the most successful Ethiopian sectors for small business and entrepreneurs, generating profit margins ranging from 50 percent to more than 100 percent, according to Mahlet Afework, the 25-year-old Addis Ababa-based founder of fashion line MAFI.

The country is a fashion designer’s dream due to its multiple ethnic groups from which one can draw design inspiration, Mahlet tells IPS. Her most recent collection was inspired by the Dinguza pattern from southern Ethiopia’s Chencha region.“[Ethiopia’s fashion industry] is showing the diversity and beauty of Ethiopian culture, and providing some of the world’s best hand-woven cotton fabrics.” -- Fikirte Addis, fashion designer and founder of YeFikir Design

Small companies like Mahlet’s can flourish due to the absence of big chain department stores, and relatively low start-up costs set against high prices individuals are willing to pay for quality hand-made fashion garments

And the economy at large is benefiting from increased international interest in Ethiopia’s textile and garment industry. The industry’s small-scale businesses, with a labour force of 10 or less, registered exports of 62.2 million dollars in 2011, up from 14.6 million dollars in 2008.

And the Ethiopian government believes the industry can raise its aggregate production value to 2.5 billion dollars by the end of 2015.

Ethiopia’s successful fashion designers are predominantly women, according to Mahlet and other designers, who grew up surrounded by traditionally woven cotton fabrics, learning from mothers and aunts the tailoring and embroidering skills for making beautiful and delicate clothing.

This female-inspired heritage is not forgotten. Mahlet works exclusively with female weavers to help them support themselves and their families amid a male-dominated weaving sector.

Despite many designers having the advantage of a home-spun fashion education, a lack of formal fashion design education is preventing many from breaking out internationally, says Mahlet, who is self-taught and credits Google Search as her primary tutor.

Another problem in the international arena is conducting sales transactions.

Ethiopian banking restrictions mean there are no foreign banks in Ethiopia and international customers are often reluctant to pay into African banking accounts, fashion designer Fikirte Addis, founder of Addis Ababa-based YeFikir Design, tells IPS.

The company currently has to sell through Africa Design Hub, a U.S.-based online store founded in 2013 by Western expatriates to showcase African designs.

“After living in East Africa for several years we saw the potential of African designs in the global market,” the store’s co-founder Elizabeth Brown tells IPS.

She also noticed a gap in market linkages and knowledge sharing between the industry and global consumers, which Africa Design Hub seeks to bridge.

Currently almost all of its customers are in the U.S., although this year it plans to start selling products to Canada and Asian countries such as South Korea, Japan and Taiwan that have shown interests in African-made goods.

Fashion design success in Ethiopia also depends on embracing the ever-changing present while keeping an eye on the past, Fikirte says.

A weaver making fabric for YeFikir Design. Credit: Salima Punjani/IPS

A weaver making fabric for YeFikir Design. Credit: Salima Punjani/IPS

All YeFikir designs are made by hand or on traditional weaving machines operated by those using techniques that go back centuries to when Ethiopians made all their own clothing. 

“I love the traditional aspect of the clothing,” Rihana Aman, a café owner in Addis Ababa, who visited the YeFikir shop to buy a wedding dress, tells IPS. “So many dresses now are too modern, and use fabrics that lose what it means to be Ethiopian.”

Fikirte deals directly with and visits weavers she sources from to ensure that skills and incomes stay within communities, and practises remain ethical. She notes how children have been trafficked within the weaving industry.

As a result of the painstaking time and work required to make the garments, YeFikir custom-made dresses can sell for up to 15,300 birr (850 dollars), a sizeable sum, especially in a country where many toil for no more than 50 birr (3 dollars) a day.

Despite such apparent inequities, many Ethiopians — especially those in the growing middle class — remain content to pay handsomely for tailored garments with traditional influences, Mahlet says.

Ethiopians take great pride in the country’s ethnic diversity — around 84 languages and 200 dialects are spoken — and in displaying allegiances through clothing at special events such as weddings and festivals, Mahlet says.

This demand is seeping into the mainstream also. Mahlet’s clothing line MAFI specialises in ready-to-wear garments offering a notably funky take on the country’s ethnic melting pot. And it is a take that has proved successful.

International interest in Ethiopia’s fashion scene is undoubtedly growing — in 2012 Mahlet showcased her work at African Fashion Week New York. However, there are still some misconceptions. On a European flight, Mahlet recalls sitting next to a passenger who was surprised to hear that fashion designers existed in Ethiopia.

Others are not so surprised.

“Ethiopia has some wonderful and interesting craftsmanship,” Markus Lupfer, a London-based fashion designer of international repute who since 2010 has worked with Ethiopian fashion designers, told IPS.

Growing international recognition for designers in Ethiopia and Africa is partly a result of growing demand for ethically-produced fashion designs, Lupfer says.

Although for now such recognition still eludes many of Ethiopia’s fashion designers. And while local demand remains buoyant, designers agree that international demand remains the key to success.

Hence Mahlet and Fikirte plan to bolster their companies’ online presences this year. Both share a goal of exporting clothes to boutiques and online stores — and want to show the world what Ethiopian designers are capable of.

“Ethiopia’s fashion industry is changing the image of Ethiopia,” Fikirte says. “It is showing the diversity and beauty of Ethiopian culture, and providing some of the world’s best hand-woven cotton fabrics.”

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Drugs Displace Maize on Mexico’s Small Farmshttp://www.ipsnews.net/2014/01/drugs-displace-maize-mexicos-small-farms/?utm_source=rss&utm_medium=rss&utm_campaign=drugs-displace-maize-mexicos-small-farms http://www.ipsnews.net/2014/01/drugs-displace-maize-mexicos-small-farms/#comments Wed, 22 Jan 2014 07:15:39 +0000 Emilio Godoy http://www.ipsnews.net/?p=130539 Maize, Mexico’s main crop and staple food, faces threats like displacement by drug cultivation. Credit: Emilio Godoy/IPS

Maize, Mexico’s main crop and staple food, faces threats like displacement by drug cultivation. Credit: Emilio Godoy/IPS

By Emilio Godoy
MEXICO CITY, Jan 22 2014 (IPS)

As the North American Free Trade Agreement (NAFTA) passes its 20-year milestone, Mexico is seeing the displacement of traditional crops like maize by marihuana and opium poppy as a result of falling prices for the country’s most important agricultural product.

After NAFTA came into force between Canada, the United States and Mexico in January 1994, prices of maize and other agricultural products began to tumble, hurting the incomes of the smallest farmers who became the target of drug trafficking mafias.

“This has happened in regions where there are poor farmers, where prices have collapsed and productivity is low. They have to resort to drug traffickers for loans or to rent land,” said Víctor Quintana, an adviser to the Frente Democrático Campesino (Peasant’s Democratic Front) in the northern state of Chihuahua.

Quintana told IPS about the Pima native people who live in Chihuahua and the adjacent state of Sonora, who he says have become suppliers of raw materials to drug trafficking cartels engaged in violent disputes over distribution routes to the lucrative U.S. market.

“The process started in the 1980s, but has increased since 2006 with penetration by the Sinaloa and Juárez cartels,” he said about the battle between the two drug mafias for control of the border region.

Maize is especially symbolic in Mexico, regarded as its place of origin. With 59 native strains and 209 varieties, it is an essential part of the population’s diet.

Mexico produces 22 million tonnes of maize annually, but has to import a further 10 million tonnes to meet demand, according to the agriculture ministry and producers’ associations.

Some three million farmers grow maize on about eight million hectares. Two-thirds of them grow it for family consumption only.

Omar García Ponce, a researcher in the department of politics at the University of New York, told IPS that “the deteriorating economy in maize-growing municipalities (state subdivisions) is closely linked to the cultivation of drugs.”

In his view, declining income from maize farming is the reason why the country has become one of the foremost producers of marijuana and opium poppies.

García Ponce, Oeindrila Dube and Kevin Thom of the University of New York published a study in August 2013 titled “From Maize to Haze: Agricultural Shocks and the Growth of the Mexican Drug Sector,” which concludes that lower prices increased the planting of illegal crops in municipalities more climatically suited to growing maize.

The authors analysed data from more than 2,200 municipalities for the period 1990-2010 on production, agricultural employment and income. They also measured the impact of variations in maize prices on drug cultivation and pointed to the violent consequences of an expanding drug sector.

The study emphasises that NAFTA forced liberalisation of maize trade, expanding import quotas and reducing tariffs, as well as precipitating a huge fall in maize prices in Mexico.

Maize prices fell 59 percent between 1990 and 2005, leading to a 25 percent reduction in the incomes of maize farmers.

At the same time, drug-related killings increased by an average of 62 percent in maize suitable municipalities, the study says.

As a result of the 2007 global food crisis, maize prices increased by eight percent in the year to 2008, while drug-related homicides decreased by 12 percent in maize suitable municipalities.

Drug seizures rose by 16 percent and eradication of drug crops by eight percent, in contrast with non-maize growing areas.

Production of native maize in Mexico is also endangered by the threat of authorisation of commercial production of transgenic maize.

“[Lower] maize prices contributed to the burgeoning drug trade in Mexico,” says the study, the first to identify the role of rural income shocks in the development of drug trafficking in Mexico.

The study mapped areas of the states of Sinaloa, Guerrero, Michoacán, Chiapas, Oaxaca, Tamaulipas, Yucatán and Campeche, where there has been crop substitution. Drug crop eradication has been concentrated along the western and southern ranges of the Sierra Madre and adjacent coastal areas.

Ministry of defence (SEDENA) figures indicate that marijuana eradication increased between 1990 and 2003 from 5,400 to 34,000 hectares, respectively, declining afterward to 17,900 hectares in 2010.

Between December 2006 and November 2012, the six-year term served by conservative President Felipe Calderón, the armed forces destroyed 98,354 hectares, while in 2013, during the first year of conservative President Enrique Peña Nieto, 5,096 hectares were destroyed.

Opium poppy eradication began with 5,950 hectares in 1990, rose to 20,200 hectares in 2005 and fell to 15,331 hectares in 2010. Between December 2006 and November 2012 the armed forces destroyed 86,428 hectares.

In 2013, 14,419 hectares were eradicated.

The subject of illegal crops is taboo in maize-growing areas. Although rumours abound that farmers are growing drugs hidden among their fields, no one openly admits to having anything to do with it.

“You hear about a particular producer growing drugs, but people are afraid to talk about it,” farmers in the states of Jalisco and Guerrero told IPS on condition of anonymity for the sake of their safety.

Since 2011 the Mexican media and the attorney general’s office announced that at least two small farmers had been arrested for growing drugs in the central states of Puebla and Guerrero.

Peña Nieto announced a 26 billion dollar budget and “an extensive reform” for the country’s rural areas in 2014. But experts are doubtful whether these measures will change the situation of small farmers.

“If they concentrate on a handful of states and do not change the structure of resource distribution, things will remain the same in the rural areas, and in particular, with drug cultivation,” Quintana said.

On the other hand, “if idle lands are cultivated, if productivity is raised, and if technical support is provided for poor and indigenous small farmers, the problem could shrink,” said Quintana, who advocates a minimum guaranteed price for maize to counteract the dismantling of support for local production resulting from NAFTA.

García Ponce recommends “greater emphasis on helping the most vulnerable farmers. The situation in rural areas and the incentives that exist for farmers to turn to illegal crops have been ignored by public policies.”

The study also concluded that the fall in maize prices has resulted in an increase of five percentage points in the probability of a drug cartel appearing in a municipality.

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Africa’s Billions that the Poor Won’t Touchhttp://www.ipsnews.net/2014/01/africas-billions-poor-wont-touch/?utm_source=rss&utm_medium=rss&utm_campaign=africas-billions-poor-wont-touch http://www.ipsnews.net/2014/01/africas-billions-poor-wont-touch/#comments Fri, 17 Jan 2014 14:12:09 +0000 Jeffrey Moyo and Miriam Gathigah http://www.ipsnews.net/?p=130368 Artisanal diamond miners at work in the alluvial diamond mines around the eastern town of Koidu, Sierra Leone. While the continent is rich in mineral and oil wealth, Africa’s majority may have to wait a long time before they benefit from this. Credit: Tommy Trenchard/IPS

Artisanal diamond miners at work in the alluvial diamond mines around the eastern town of Koidu, Sierra Leone. While the continent is rich in mineral and oil wealth, Africa’s majority may have to wait a long time before they benefit from this. Credit: Tommy Trenchard/IPS

By Jeffrey Moyo and Miriam Gathigah
NAIROBI/HARARE, Jan 17 2014 (IPS)

With its two-trillion-dollar economy, recent discoveries of billions of dollars worth of minerals and oil, and the number of investment opportunities it has to offer global players, Africa is slowly shedding its image as a development burden. 

“While global direct investment has shown some decline, dropping by 18 percent in 2012, in Africa foreign direct investment rose by five percent,” Ken Ogwang, an economic expert affiliated with the Kenya Private Sector Alliance (KEPSA), which has a membership of over 60 businesses, told IPS.“Underhand dealings in the mining of diamonds and other rich minerals here have fuelled poverty.” -- economic analyst, Jameson Gatawa

Since 2012, Kenya has made a series of mineral discoveries, including unearthing 62.4 billion dollars worth of Niobium – a rare earth deposit. The discovery in Kenya’s Kwale County has made the area among the world’s top five rare earth deposits sites, and allows Kenya to enter a market that has long been dominated by China.

In 2012, Kenya discovered 600 million barrels of oil reserves in Turkana county, one of the country’s poorest regions. It was announced on Jan. 15 that two more wells struck oil, increasing estimate reserves to one billion barrels of oil.

But Kenya, East Africa’s economic powerhouse, is not the only African nation that has made fresh mineral discoveries.

“The recent boom in new mining discoveries in countries such as Niger, Sierra Leone and Zambia will attract billions in foreign direct investments. Other countries like Mozambique, Tanzania and Uganda will similarly attract billions due to petroleum discoveries there,” Antony Mokaya of the Kenya Land Alliance, a local umbrella network of NGOs and individuals working on land reforms, told IPS.

Last year, both Uganda and Mozambique discovered oil. In 2006, an estimated two billion barrels of oil reserves were discovered in western Uganda, but last year’s discovery brings Uganda’s total oil deposits to 3.5 billion barrels. Mozambique’s first oil discovery last year is estimated to be 200 million barrels.

Ogwang predicts that these discoveries will soon see African countries dominating the list of the 15 fastest-growing economies in the world.

“More African countries, Kenya being a model example in East Africa, now favour a market-based economy, which is highly competitive and the most liberal economic system.

“In this system, market trends are driven by supply and demand with very few restrictions on who the actors are. [It is] a favourable environment for foreign investors,” he said, referring to the local mobile phone industry, which has been dominated by foreign investors because of its favourable regulatory policies.

“As a result, growth in this sector is phenomenal. In the first 11 months of 2013, Kenya’s mobile phone money transactions were 19.5 billion dollars, which is more than the country’s current 18.4-billion-dollar national budget.”

Ogwang says that even more importantly, African countries are increasingly strengthening their partnerships with the East.

Statistics by the Africa Economic Outlook, which provides comprehensive data on Africa economies, show that China is the largest destination for African exports, accounting for a quarter of all exports.

Trade with Brazil, Russia, India and China – the economic bloc referred to as BRICs – now accounts for 36 percent or 144 billion dollars of Africa’s exports, up from only nine percent in 2002.

In comparison, Africa’s trade with the European Union and the United States combined totals 148 billion dollars.

But Terry Mutsvanga, director of the Coalition Against Corruption, an anti-corruption lobby group in Zimbabwe, cautioned that Africa will first have to rein in its corrupt politicians before its resources can enrich its own people.

According to the World Bank, some of the world’s poorest people live in Africa, with one out of two Africans living in extreme poverty.

“Without Africa dealing with the cancer of political corruption blighting the continent and robbing it of revenue from mineral resources through corrupt politicians receiving bribes from investors … the continent shall [continue to have] the worst poverty levels globally,” Mutsvanga told IPS.

Independent economic analyst Jameson Gatawa from Zimbabwe agreed.

“Underhanded dealings in the mining of diamonds and other rich minerals here have fuelled poverty. The rich are getting richer with the poor becoming poorer,” Gatawa told IPS.

For 54-year-old Sarudzai Mutavara, a widow who lives in the midst of Zimbabwe’s Marange diamond fields, poverty remains a daily reality.

Zimbabwe is one of the world’s top 10 diamond producers. But six out of every 10 households in Zimbabwe, a country of about 13 million people, are living in dire poverty. This is according to a 2013 poverty assessment report by the Zimbabwe National Statistics Agency.

“Here in Marange, the diamond wealth has not [helped] in any way to change our lives for the better, but rather for the worse as we have strayed further into poverty,” Mutavara told IPS.

The Democratic Republic of Congo (DRC) is another African country rich in diamonds, with its mineral wealth estimated in the trillions of dollars. But according to the United Nations, about 75 percent of its people live below the poverty line.

More than half of these have no access to drinking water or to basic healthcare. Three out of every 10 children are poorly nourished, with up to 20 percent of them predicted to die by the age of five.

While Ogwang says Africa’s best economic years are yet to come, it remains to be seen if the billions of dollars Africa has in natural resources will trickle down to people like Mutavara.

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Zimbabwe’s Rocky Economic Start to 2014http://www.ipsnews.net/2014/01/zimbabwes-rocky-economic-start-2014/?utm_source=rss&utm_medium=rss&utm_campaign=zimbabwes-rocky-economic-start-2014 http://www.ipsnews.net/2014/01/zimbabwes-rocky-economic-start-2014/#comments Tue, 14 Jan 2014 17:16:28 +0000 Jeffrey Moyo http://www.ipsnews.net/?p=130186 Tichaona Mhundu from Zimbabwe's Mashonaland East province. Millions of Zimbabweans say they are unsure about what 2014 holds for them. Credit: Jeffrey Moyo/IPS

Tichaona Mhundu from Zimbabwe's Mashonaland East province. Millions of Zimbabweans say they are unsure about what 2014 holds for them. Credit: Jeffrey Moyo/IPS

By Jeffrey Moyo
HARARE, Jan 14 2014 (IPS)

Evelyn Mhasi, a qualified nurse, has not worked in her profession for the last seven years. Hiring in several Zimbabwean government sectors, including nursing, remains frozen despite colleges churning out skilled professionals each year. 

For many in this southern African nation, the passing of another year only brings with it a deepening dread of the future as many struggle without jobs. According to the Reserve Bank of Zimbabwe, the country’s unemployment rate increased to 10.70 percent in 2011 from 4.20 percent in 2004.

However, the United Nations World Food Programme estimates that Zimbabwe’s unemployment rate is about 60 percent. While solid statistics are hard to come by, the vast majority of the country’s workforce is involved in the informal sector.

 

According to the National Statistics Office, Zimbabwe produces about 36,000 higher education graduates annually.

Mhasi, 29, closely followed the 2014 national budget announcement by Zimbabwe’s Finance Minister Patrick Chinamasa in December.“Zimbabwe faces both a crisis in the economy and in leadership after the rigged 2013 polls." -- Zimbabwe’s former finance minister, Tendai Biti

“I followed the proceedings optimistically, thinking that the government was going to unfreeze some posts for skilled people like me, but to no avail,” Mhasi told IPS.

“Another election may come in 2018 to find me still unemployed,” said Mhasi. “For me, 2014 already looks bleak and my hopes of finding employment are fast fading.”

Former finance minister and member of the opposition Movement for Democratic Change-Tsvangirai, Tendai Biti, told IPS: “Zimbabwe faces both a crisis in the economy and in leadership after the rigged 2013 polls. It’s easy to rig elections, but the economy is a totally different game. Sadly, we are on auto cruise back to the 2008 scenario.”

During 2008, when the country’s disputed election results resulted in a power-sharing government, Zimbabwe experienced an economic meltdown, with hyperinflation reaching 231 million percent.

The Confederation of Zimbabwe Industries, an organisation that develops and promotes business activities, says that a number of industries have already failed to re-open this year because of financial difficulties. However, it was unable to provide any figures.

Independent economist Kingston Nyakurukwa said ordinary people were surviving on shoestring budgets with many unsure about what 2014 held for them.

“Remember that last year’s bonuses for civil servants came in batches, which obviously rendered the entire civil service doubtful about what the future held for them in 2014, and even now people fear how they shall fare in the new year,” Nyakurukwa told IPS.

“With a 2014 national budget of over four billion dollars, but devoid of adequate revenue collections to meet the target, Zimbabwe heads towards an economic plunge this year,” Nyakurukwa added.

For Nyson Chimukwere, a fruit and vegetable vendor from Marondera, a town 80 kilometres east of Zimbabwe’s capital Harare, the year ahead looks gloomy.

“People no longer have enough money to spend,” Chimukwere, 44, told IPS. “These days I’m returning home with my pushcart laden with fruits and vegetables, which now rot at home.”

Chimukwere, a father of four, said his earnings have reduced by almost 75 percent.

“I’m afraid this year I may end up making nothing from my business. I used to take home about 50 dollars daily from my sales, but now things have taken a nasty turn – I take home 15 dollars or even far less,” said Chimukwere.

Rik Davison, who runs the Rik-Davy Glass Company, which employs over 800 people in Zimbabwe’s oldest town Masvingo, also dreads the year ahead.

“Lately [business] declined sharply, leaving us going for several days without making any sales, evident of the uncertainties shrouding 2014,” Davison told IPS, adding that because of this he has failed to pay his employees wages on time.

Davison said that his fears were worsened by the government’s insistence on implementing the Indigenisation and Economic Empowerment Act of 2007, which forces foreign-owned companies to cede 51 percent of their shares to local black entrepreneurs. Davison, who is white, has yet to cede his shares.

But Kudakwashe Bhasikiti, a politiburo member of the ruling Zimbabwe African National Union – Patriotic Front, believes that 2014 is set to be a prosperous year.

“We have nothing to fear here with the indigenisation policy in place, we are sure to give wealth to the black people of Zimbabwe,” Bhasikiti, who is the parliamentarian for Zimbabwe’s Mwenezi East constituency, told IPS.

Some economists predict that public employees may suffer the brunt of a government payroll shortage.

“With revenue collections massively dwindling, this year the Zimbabwean government may fail to sustainably remunerate the already poorly-paid civil servants, after it turned mum on increasing their wages in the budget announcement,” economic expert Agrippa Nhumwe told IPS.

A local banker told IPS on the condition of anonymity that hard times were imminent for Zimbabwe’s local banks.

“With cash shortages rocking indigenous banks here, hard times are set to roll this year, fuelling civilians’ fear in the face of an unpredictable government, which amid such circumstances may at any time re-introduce the dreaded Zimbabwean dollar dumped in 2008,” the banker told IPS.

The Reserve Bank of Zimbabwe, which at the height of the country’s economic meltdown was forced to issue a 100 trillion Zimbabwean dollar note, was forced to stop printing money and adopt a multi-currency regime.

For millions of Zimbabweans, it remains to be seen whether or not President Robert Mugabe’s government will succeed in manoeuvring through 2014.

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Throwing the Tanzania-Zambia Railway a Lifelinehttp://www.ipsnews.net/2013/12/tanzania-zambia-railway-line-time-stands-still/?utm_source=rss&utm_medium=rss&utm_campaign=tanzania-zambia-railway-line-time-stands-still http://www.ipsnews.net/2013/12/tanzania-zambia-railway-line-time-stands-still/#comments Wed, 11 Dec 2013 10:58:37 +0000 Amy Fallon http://www.ipsnews.net/?p=129458 The Tanzania-Zambia Railway Authority (TAZARA) line has about 900,000 passengers who use the railway annually. Credit: Amy Fallon/IPS

The Tanzania-Zambia Railway Authority (TAZARA) line has about 900,000 passengers who use the railway annually. Credit: Amy Fallon/IPS

By Amy Fallon
DAR ES SALAAM, Dec 11 2013 (IPS)

Some say it’s the journey, not the destination that matters. Hop aboard the Tanzania-Zambia Railway Authority (TAZARA) line at Tanzania’s Dar es Salaam port and begin the 1,860-kilometre journey to Kapiri Mposhi, a small town in Zambia’s Central Province, and you may find yourself pondering this adage.

For a large number of passengers using what is known as the “Freedom” or “Great Uhuru Railway”, it is about getting from point A to point B safely. The railway line is a necessity today, given that some roads in southeastern Tanzania are poor, impassable or nonexistent.

“Try and travel on those buses … You’ll pray you arrive,” Lawrence Pangani, a pension scheme manager who is listening to music on his portable stereo, tells IPS.

Pangani, along with a number of Zambian and Congolese businessmen, are travelling in TAZARA’s first class cabin as the train crosses the Rift Valley. He is making his way from Tanzania’s capital, Dar es Salaam, where he was working, to his home in Kabwe, which lies west of Zambia’s capital Lusaka.

The railway was built in the 1970s with an interest-free loan of about 412 million dollars from China. At the time, it was the largest single foreign-aid project undertaken by the Asian country. TAZARA was handed over to Tanzania and Zambia in 1976.

It became a significant alternative transport system for Zambia, a copper-rich but landlocked southern African state which, at the time, was sanctioned by still-colonised neighbouring regimes for supporting the liberation struggle of many of those countries.

But in recent times TAZARA has veered off track. Just over five years ago the railway was said to be “on the brink of collapse” after accumulating debts of up to 45 million dollars.

In 2011 China, described by TAZARA spokesman Conrad Simuchile as the railway’s “surrogate mother”, signed a protocol with the Zambian and Tanzanian governments, writing off roughly 50 percent of their debts. Simuchile tells IPS that most of the support for TAZARA, in the form of equipment and expertise, has come from China. He stresses that there are no conditions attached to the assistance.

But even with this help, the railway is still struggling.

In September it was reported that revenue had averaged 1.53 million dollars per month against an estimated average expenditure of over 2.5 million dollars.

A two-week strike, which began in August over the unpaid wages of 1,067 workers, cost TAZARA 1.4 million dollars and inconvenienced 46,000 passengers.

The company desperately needs recapitalisation, says Simuchile.

“We are doing so badly right now. But this is not a write-off. This company, TAZARA, is not a perpetual loss-making company [as some places have dismissed it],”  he says from his office at the railway’s Dar es Salaam headquarters.

“All we need is just maybe three or four major customers and this company will break even, make a profit. And we have clients knocking on our doors everyday. They want us to move their cargo.”

He says government ministers have recently given the company leeway to look for smart partnerships with the private sector without necessarily affecting the shareholding structure.

Simuchile is optimistic the line will be extended to Lusaka in the next two years.

“It’s very convenient for our customers but [we are not just transporting] minerals – copper, cobalt, manganese. We are also moving a lot of imports from Asia, from all over the world. They come in through Dar es Salaam and they go on to Malawi, Congo, Zambia, and the Great Lakes countries of Burundi and Rwanda.”

Nelson Nyangu, director of transport in Zambia’s ministry of transport, works, supply and communication, says TAZARA is a “lifeline” for Zambia and its operations must be “immediately revitalised”.

“At present the authority is experiencing serious operational and management challenges that have resulted in the company operating below break-even point,” he tells IPS.

TAZARA’s hauling capacity has gone down from a peak of over one million mega tonnes per year to less than 500,000, Nyangu says.

However, there are still about 900,000 passengers who use the railway annually.

Today, farmer Emmanuel* is transporting his rice to sell at the local market in Makambako, a town in Tanzania’s southern highlands. A super-seater ticket cost him about nine dollars, compared to a bus ticket that costs nearly 25 dollars and involves three changes.

TAZARA runs two passenger services a week. The one that departs Zambia on Tuesdays is called the “Mukuba Express”, mukuba meaning “copper” in the country’s Bemba language. The Friday service from Tanzania is called “Kilimanjaro”.

Today’s Kilimanjaro service left Dar es Salaam nearly 10 hours late and is failing to make up time.

“I was supposed to pass through this place at night. Now it’s daytime, meaning my schedule has been delayed,” says Emmanuel, speaking in Swahili through an interpreter.

Simuchile admits there are “breakdowns on a weekly basis”.

“Our infrastructure is really rundown,” he says. “Our equipment itself, the locomotive, the wagons they’ve really aged and maintenance schedules have not been followed because of the serious lack of recapitalisation.”

But Simuchile points out, “it’s the unexpected things that happen that really are interesting.”

“The things you experience on TAZARA are the real life experiences Africans have on a daily basis. The hiccups you face are part of the reality,” he says. “So the important thing is to get on TAZARA with an open mind.” And an open schedule.

But for some foreign passengers who are travelling on a train in Africa for the first time, these “hiccups” may be what is most exciting about the trip.

Sara Strandstoft, her partner Jacob Anderson, and their two boys travelling on TAZARA. After three days on board, the Danish family still does not know when they will reach their final destination of Kasama, in Zambia’s Northern Province.

“We took our watches off, time goes as it goes,” Strandstoft tells IPS, laughing.

*Not his real name.

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Côte d’Ivoire Poised at a Development Crossroadhttp://www.ipsnews.net/2013/11/cote-divoire-poised-at-a-development-crossroad/?utm_source=rss&utm_medium=rss&utm_campaign=cote-divoire-poised-at-a-development-crossroad http://www.ipsnews.net/2013/11/cote-divoire-poised-at-a-development-crossroad/#comments Mon, 18 Nov 2013 09:14:09 +0000 Marc-Andre Boisvert http://www.ipsnews.net/?p=128887 Abidjan, Côte d’Ivoire’s economic centre, is the scene of major infrastructure development. Credit: Marc-André Boisvert/IPS

Abidjan, Côte d’Ivoire’s economic centre, is the scene of major infrastructure development. Credit: Marc-André Boisvert/IPS

By Marc-Andre Boisvert
ABIDJAN, Côte d’Ivoire, Nov 18 2013 (IPS)

All over the Ivorian economic capital, Abidjan, large cranes, involved in the construction of new buildings and highways, are dotted across the city skyline.

Soon this city, which is split in two by a lagoon, will have a second port terminal, a fourth bridge and several overpasses and other major infrastructure that are expected to metamorphose Abidjan’s landscape. Business is clearly improving in this West African nation.

Côte d’Ivoire’s booming business successes have been highlighted by the World Bank “Doing Business 2014” report, where its economy was ranked 20th for having made the most significant improvement in its business environment since 2005.

In times of a global economic downturn, Côte d’Ivoire is a rare case. Not only does the country have a positive GDP growth for 2012, but the numbers exceed expectations at 9,8 percent rather than the 8,1 percent forecast by the International Monetary Fund.

But while Côte d’Ivoire’s growth may be impressive the world over, its population of about 19.8 million is impatient to see these economic gains transform their lives for the better.

Marius Comoe, president of the Federation of Consumer Associations of Ivory Coast (FACACI), is convinced that things are getting worse.

“Purchasing power has diminished. Basic food and gas prices have increased substantially,” he told IPS.

At the Carena market in downtown Abidjan, women complain about the increasing cost of life.

“Ah, it is so expensive. Prices have increased a lot in the last two years. I really have difficulty [making] ends meet. Vegetable prices have increased, but meat and oil are becoming incredibly expensive,” Alice Boue told IPS while selecting a few vegetables to purchase.

Martine Broue says that while the cost of other goods have gone up, her vegetables prices have not. Credit: Marc-André Boisvert/IPS

Martine Broue, a trader at the Carena market in downtown Abidjan, Côte d’Ivoire, says that while the cost of other goods have gone up, her vegetables prices have not. Credit: Marc-André Boisvert/IPS

But vegetable seller Martine Broue argued that while the cost of other goods have gone up, her vegetables prices have not. Prices of vegetables are difficult to track because of the constant fluctuations. The National Institute of Statistics, known by its French acronym, INS, estimates that vegetable prices have increased about 10 percent from October 2012 to October 2013.

In addition, cooking oil has almost doubled in price from 1.30 dollars in 2010 to 2.4 dollars in 2013. Meat, which sold for about four dollars a kilogramme (kg) in January 2013 currently costs about 4,6 dollars a kg in some areas. Rice, however, has maintained a steady price over the last year at about 65 cents per kg, according the Famine Early Warning Systems Network.

“Spending power is not only about staple goods. Electricity is now double the cost of what it was under [former President Laurent] Gbagbo and affordable accommodation is impossible to find,” explained Comoe. INS estimates that the total cost of energy has increased 6,3 percent in the last year.

And these price hikes have also affected services.

“Healthcare is two to three times more expensive than it was three years ago,” said Comoe. The cost of education has increased by 25,3 percent for high school and 92,6 percent for university fees. “Several kids cannot go to school because their parents do not have the money to pay for school fees,” Comoe added.

Dr. José Coffie N’Guessan, economist and director of research at the Ivorian Centre of Economic and Social Research, explained the contradiction in the country’s rapid economic growth and the lack of improvement for people.

“This huge growth rate is not extraordinary, considering that the economy has contracted roughly five percent in the years prior to 2012,” he told IPS. Côte d’Ivoire has faced several crises since the 1999 coup d’état and most recently the 2010 to 2011 post-electoral crisis that resulted in over 3,000 deaths.

“We are catching up with the past. [The economic growth] will be remarkable if we are able to maintain those numbers for two to three years,” N’Guessan said, explaining that the majority of the country’s growth was largely due to the necessary infrastructure investments currently being made by the government, which were postponed since the country’s post-electoral crisis.

N’Guessan is uncertain whether this growth will reduce unemployment, pointing out “this is not automatic.”

According to the General Confederation of Companies of Côte d’Ivoire, last year about five million Ivoirians were unemployed, with the unemployment rate among 15- to 35-year-olds as high as 60 percent.

“Growth will be stimulated by building new infrastructure, but it might not translate into jobs the same way that investments made in factories [do]. So far, Ivoirians do not feel that unemployment is going down,” N’Guessan said.

He added that foreign investors “tended to be interested in sectors that do not create a lot of jobs, especially natural resources. To create jobs, we have to invest in agriculture, agro-industries and the tertiary sector.”

“The population has yet to gain from this growth. The impact is never immediate. It will take a certain time. We have to be patient. Government has decided to reach high to bring wealth fast,” N’Guessan said.

He said that in order for the government to build a sustainable growth, it had to invest “in something else other than ostentatious infrastructures.”

“We need to invest in human capital. We are at a crossroad. And it is important to not miss it.”

 

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Mobile Phones Big Hit in Rural Zimbabwehttp://www.ipsnews.net/2013/09/mobile-phones-big-hit-in-rural-zimbabwe/?utm_source=rss&utm_medium=rss&utm_campaign=mobile-phones-big-hit-in-rural-zimbabwe http://www.ipsnews.net/2013/09/mobile-phones-big-hit-in-rural-zimbabwe/#comments Wed, 04 Sep 2013 08:47:51 +0000 Michelle Chifamba http://www.ipsnews.net/?p=127281 Because of a lack of electricity in Zimbabwe’s rural areas, most people have to charge their mobile phones on solar-powered chargers. Credit: Isaiah Esipisu/IPS

Because of a lack of electricity in Zimbabwe’s rural areas, most people have to charge their mobile phones on solar-powered chargers. Credit: Isaiah Esipisu/IPS

By Michelle Chifamba
HARARE, Sep 4 2013 (IPS)

Prosper Muripo rents a small space in a general dealer’s shop at the Gotora shopping centre in Zimbabwe’s Mashonaland East province. He is one of the many people in rural Zimbabwe who earn a living selling recharge vouchers and charging mobile phone batteries on solar-powered chargers.

“I charge 50 cents to charge a battery for 30 minutes and a dollar for an hour. I also charge non-owners of mobile phones 50 cents to make a one-minute phone call,” Muripo told IPS.

Rural Zimbabwe is characterised by a lack of proper infrastructure, a limited electricity supply and poor road networks. Traditionally, communication to these areas has always been limited.“Job notifications can now be sent on mobile phones. I’m not employed and when work is available in the city and the major towns I can be notified.” -- Rural Zimbabwean Miriam Chauke

However, over the past five years mobile phones have begun providing a means of communication, connecting Zimbabwe’s rural population with urban dwellers.

According to the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ), a body mandated to issue licences in the postal and telecommunications sector, Zimbabwe now has a mobile penetration of 97 percent.

“The increase in mobile penetration has been triggered by increased investment in communication infrastructure in both urban and rural areas, meaning that marginalised people can now afford to use mobile phones,” POTRAZ acting director Alfred Marisa told IPS.

Mobile phones have slowly become the simplest and cheapest mode of communication in this southern African nation.

According to the Zimbabwe Statistics Agency’s 2011-2012 Poverty Income Consumption and Expenditure Survey, which was released in June, 7.7 percent of Zimbabwe’s economically active population is unemployed. This is a marked contrast to previously reported unemployment figures of 85 to 90 percent.

The report also noted that 8.2 million Zimbabweans in rural areas are poor, while 10.7 percent of the rural population is unemployed. It is estimated that 72 percent of Zimbabwe’s  12.75 million people live in rural areas.

But despite these high poverty figures for rural Zimbabwe, mobile phone usage is growing rapidly there.

According to Frost and Sullivan Growth Partnership Services, an international company that conducts business research to accelerate growth, “despite the high levels of unemployment, the number of mobile phone subscribers in Zimbabwe has increased from less than two million at the end of 2008 to more than 10.9 million in 2013.” The country’s mobile phone users are expected to reach 13.5 million subscribers by 2015 and the industry will be worth 1.34 billion dollars by 2016.

Much of this increased usage has been attributed to a massive decline in SIM card prices. In 2008, a SIM card cost about 90 dollars, now it costs less than one dollar. And since 2009, when Zimbabwe opted to adopt a multi-currency regime to beat hyperinflation under the Zimbabwean dollar, Chinese-made mobile phones have become easily available here. On average they cost about 21 dollars.

Mobile phone dealers who sell Chinese-made products in Harare say they are doing brisk trade as a result of the affordability of their products.

“Business is booming, especially during the tobacco harvesting season when many rural farmers auction their produce [in the city]. Since the multi-currencies system brought economic stability, people have steady incomes and can save to purchase gadgets such as mobile phones, which were [previously] reserved for the rich and elite,” mobile phone seller Sylvester Mbirimani told IPS.

Telecel Zimbabwe, the country’s second-largest mobile phone operator, has been expanding and upgrading its network over the last two years to access more subscribers in rural areas.

“Telecel has been creating value for money for its clients. We were the first to slash the price of SIM cards and we are committed to satisfy our clients and promote growth in all unconnected areas,” Telecel marketing director Octivius Kahiya told IPS.

Many rural Zimbabweans like Miriam Chauke from Mutare, Manicaland Province, say that the access to mobile phones has empowered them. Chauke is unemployed but she worked part time as a manual labourer and was able to earn enough money to purchase a SIM card and a cheap mobile phone.

“It now seems that mobile phone use is becoming a basic human right, because they are offering the opportunity to help [close] communication barriers that were present in the past.

“Job notifications can now be sent on mobile phones. I’m not employed and when work is available in the city and the major towns I can be notified [by SMS subscription service],” Chauke told IPS.

Mobile phones have also compensated for poor banking services in rural areas thanks to mobile banking. Now rural Zimbabweans are able to supercede the rigid rules of formal banking and make financial transactions. However, this still remains a fledgling market as most rural Zimbabweans still mostly use their mobile phones for texts and making calls.

Economic analyst Eric Shabangu predicts that the mobile phone banking has the potential to become the biggest banking platform in Zimbabwe.

“The rapid spread of mobile phone penetration, as opposed to bank outreach, has created a fertile ground for mobile money to grow in Zimbabwe. Mobile banking could be the platform for rapid financial inclusion of people that now only need mobile phones to access a certain range of essential financial services they never used to get,” Shabangu told IPS.

According to Josham Gurira, an economist at the University of Zimbabwe, access to mobile phones will continue to change rural Zimbabwe.

“Access to information and communication technologies is now considered a basic human right and mobile phones have offered the best opportunity to enhance the digital divide which could have prevented it. The use of mobile technology has empowered many people and is regarded as a key tool in helping alleviate global poverty,” Gurira told IPS.

“The adaption of mobile technology has redefined the way people communicate and the growth in mobile phone use has shaped a new way of engagement and connection. Mobile phones are providing Zimbabwe with an opportunity to develop,” he said.

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West Cold-Shoulders Rebuilding Southern Africahttp://www.ipsnews.net/2013/08/west-cold-shoulders-rebuilding-southern-africa/?utm_source=rss&utm_medium=rss&utm_campaign=west-cold-shoulders-rebuilding-southern-africa http://www.ipsnews.net/2013/08/west-cold-shoulders-rebuilding-southern-africa/#comments Thu, 29 Aug 2013 08:25:40 +0000 John Fraser and Collins Mtika http://www.ipsnews.net/?p=127129 The Southern African Development Community has an ambitious infrastructure development plan to deal with the region’s deficit road, rail and ports infrastructure. Pictured here is the Democratic Republic of Congo capital, Kinshasa. Credit: Einberger/argum/EED/IPS

The Southern African Development Community has an ambitious infrastructure development plan to deal with the region’s deficit road, rail and ports infrastructure. Pictured here is the Democratic Republic of Congo capital, Kinshasa. Credit: Einberger/argum/EED/IPS

By John Fraser and Collins Mtika
LILONGWE/JOHANNESBURG, Aug 29 2013 (IPS)

The Southern African Development Community has had to revisit its plans to raise funding for its ambitious regional development plan in the wake of a cold-shoulder from western nations and multilateral finance institutions.

“Nobody has come forward to fund any of the projects we have outlined. I have been to Japan, the United States and the United Kingdom, among other countries,” SADC deputy executive secretary for regional integration Joao Samuel Caholo told IPS.

“What is holding us back as SADC is our inability to fund our own priorities and programmes. Therefore, a sustainable funding mechanism has to be established if we are to show that we are committed and progressing.”

However, development experts have questioned whether SADC is sufficiently mature to handle ambitious projects such as the Regional Infrastructure Development Master Plan (RIDMP), which is estimated to cost 500 billion dollars.

The RIDMP aims to rebuild the region’s deficit road, rail and ports infrastructure, increase its power-generation capacity, and establish communication and weather systems. Access to water, and providing the infrastructure for its distribution is also a priority.

“SADC has the potential and we are asking for the goodwill of all member states. Let them put in the seed money,” said the outgoing executive secretary.

The long-awaited SADC Development Fund will be modelled on the European Investment Bank and other regional funding ventures. SADC countries will initially contribute 1.2 billion dollars or 51 percent. The private sector and international partners will contribute the remaining 37 and 12 percent respectively.

Contributions will be over a five-year period starting in 2013 based on a country’s affordability, institutional capacity and other criteria, which Caholo was reluctant to divulge.

“If after five years a country fails to pay its contribution, its shares will be recalled and distributed among the complying states so that the 51 percent shareholding by African states is maintained,” Caholo said.

However, a member state will still be able to access funds for its development projects as outlined in the RIDMP.

Professor Eltie Links, the chairperson of Doing Business in Africa at South Africa’s University of Stellenbosch Business School, told IPS that “SADC as a regional body would have to think about the objectives and the management of a new financing arm.”

“The fact that the region comprises a number of countries with varied levels of development makes it essential that some or other form of assistance be given to economies that are suffering in the development sphere. This, however, can only be afforded if there is sufficient economic and financial muscle in the regional body,” Links said.

He said there was no doubt about the need for more infrastructure development in the region, but development aid channelled through SADC “will always be at the cost of the bilateral support given by these same [donor] countries to the region’s needy countries. This aid funding pool has always been finite.”

He suggested that donors would need to be convinced that SADC is now at a stage where it can handle multi-billion dollar projects.

“SADC’s record as an institution that is well organised and governed has been questioned in the past. To the extent that these perceptions of a body with challenges in governance still persist, it will not get the type of support needed for a project financing arm.

“It will also have to demonstrate the ability to administer and manage such funding and projects; something it has not been able to prove beyond any doubt.”

This view was echoed by the chief executive officer of the Frontier Advisory consultancy, Martyn Davies, who argued that the SADC secretariat should not be the body that seeks to fund projects, and should instead focus on coordinating and bringing projects to the point of bankability.

“SADC, unfortunately, does not do enough in harmonising pursuits towards regional integration, and needs to do more of the basics toward promoting the facilitation of trade and capital flow in the region,” Davies told IPS.

“Donors regularly work with SADC, but the more important engagement should be with big business, and this is currently insufficient. There needs to be greater communication from SADC as to its role and also outreach to and engagement with business in order to better implement these goals.”

Trade consultant John Mare agreed that initially SADC should play more of a coordination role.

Mare told IPS a new funding institution was not needed as “there are already too many others – but SADC can help shape bankable projects and relate them to SADC priorities.”

He added that there was a need for better capacities inside SADC to work on such projects and, especially, a greater need for coordinating mechanisms between all stakeholders at national and regional levels.

“A key challenge is to improve SADC coordination with other regional organisations in which many SADC members are also members. It is crucially important that this happens – and the tragedy is that SADC is said to have more capacity than many other regional organisations in Africa,” Mare said.

He added that while there were many potential projects in Africa, what was missing was driving mechanisms for these projects.

Davies agreed there is no shortage of projects, but suggested “the challenge lies in fostering cooperation between the respective governments and bringing the projects to bankability.”

“I have never seen a good project that cannot get funding when politics is aligned.”

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Tanzanian Traders Seek Rescue From Chinesehttp://www.ipsnews.net/2013/08/tanzanian-traders-seek-rescue-from-chinese/?utm_source=rss&utm_medium=rss&utm_campaign=tanzanian-traders-seek-rescue-from-chinese http://www.ipsnews.net/2013/08/tanzanian-traders-seek-rescue-from-chinese/#comments Thu, 15 Aug 2013 09:03:57 +0000 Kizito Makoye http://www.ipsnews.net/?p=126524 Dar es Salaam's Kariakoo market, where counterfeit goods are big business.  Credit: Sarah McGregor/IPS

Dar es Salaam's Kariakoo market, where counterfeit goods are big business. Credit: Sarah McGregor/IPS

By Kizito Makoye
DAR ES SALAAM, Aug 15 2013 (IPS)

The Chinese characters boldly painted on a supermarket poster in Tanzania’s commercial capital Dar es Salaam say a lot about the growing influence of China on this east African nation. 

At Kariakoo business district, located a stone’s throw from the city centre, virtually everybody has a story to tell about how the area is rapidly transforming into “Chinatown” due to the huge presence of Chinese merchants engaging in petty trade here.

“The world is rough and tough. It’s not a secret that most of us cannot compete with foreign traders who appear to be cleverer. The government should protect us,” Zuwena Simba, a trader at Kariakoo, tells IPS.“If we are not careful we will end up being losers because Chinese traders have made third world countries a testing ground for their commodities which could not otherwise be accepted elsewhere.” -- economist at Tanzania's Mzumbe University, Honesty Ngowi

But Joseph Xinli, a Chinese flower vender at the market, tells IPS: “I am very proud to be here because this is the only opportunity for me to make money and showcase our culture. We have to show the world what China has to offer.”

City authorities estimate that there are more than 100,000 foreign nationals currently working illegally in Dar es Salaam. While the Ministry of Industries and Trade has no exact figures, it is believed that each year thousands of Chinese entrepreneurs come here to work as hawkers or petty traders.

The Chinese merchants – who sell a range of commodities, including kitchen utensils, clothing, curtains, electronic gadgets, mobile phones, umbrellas and traditional medicine – appear to be doing brisk trade.

But according to the Ministry of Industries and Trade, most Chinese running small businesses are doing so illegally, as many are operating without the minimum capital investment of 100,000 dollars. In Tanzania, foreigners are only allowed to open businesses if they invest this minimum amount.

According to the Investment Act of 1997, a prospective investor must deposit a minimum bond of 100,000 dollars with the Tanzania Investment Centre – a government agency mandated to give investors derivative rights.

TIC’s director of Investment Promotions, John Mnali, tells IPS that if it is proven that investors are not sticking to the activities listed on their business licenses, then the law should take its own course.

“The law is crystal clear. We could, at our own discretion, revoke the license of anyone who is trying to flout investment procedure – before legal action takes place,” he explains.

Authorities also say that the Chinese traders are also flooding the market with counterfeit products. The Confederation of Tanzania Industries estimates that Tanzania loses up to 20 percent of total domestic revenue because of counterfeiting.

But Zheng Chong, who sells curtains at Kariakoo, dismisses the widespread notion that Chinese traders are flooding the local market with counterfeit goods, and putting locals out of business. He says that the market is driven by the principles of demand and supply.

“We have not broken any laws, so there is absolutely no reason for anybody to hate us, we are simply doing business,” he tells IPS.

However, a walk through the market reveals counterfeit radio sets, mobile phones, home appliances and even medicines.

Lazaro Msasalaga, a senior assurance officer at the Tanzania Bureau of Standards, tells IPS that the importing of “substandard and fake products is no doubt a big problem for our country.”

“Although we are trying our very best to curb [the sale of] these products, we don’t always succeed due to a lack of public awareness, inadequate resources and poor coordination between authorities,” he says.

“We need to come up with a joint approach that will [put an end to] this illegal practice through tightening control at entry points.”

The Fair Competition Act of 2003 states that anybody selling counterfeit goods is committing a criminal offence. Section 15(1) of the act states: “No person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”

But analysts say that although Tanzania has several laws and policies aimed at curbing the sale of fake goods, they are not enough to entirely eliminate the problem.

Legal consultant Goodluck Chuwa, who specialises in business law, says the country needs to have a comprehensive law that addresses the issue. He adds that the government needs to appoint a single regulatory body to monitor the importation of these products.

“Everybody is affected in one way or another by these products. Unless we have a specific law that addresses them, we cannot stop the products from entering the local market,” he tells IPS.

He says that since the existing laws do not clearly define what counterfeit products are, importers of fake goods have taken advantage of this legal loophole.

Two years ago, the Ministry of Industries and Trade issued a 30-day ultimatum for Chinese hawkers to leave the streets of Dar es Salaam, after accusing them of flooding the market with counterfeits. But nothing came of the threat.

Observers say that the lack of mechanisms to cushion small and medium enterprises from impending foreign competition is likely to push local traders out of the market.

However, Honesty Ngowi, an economist who teaches at Mzumbe University in Dar es Salaam, tells IPS: “It is a difficult game that does not need weak players … Those who consider themselves weak, must leave the pitch for the strongest.”

Ngowi says that the Chinese government is encouraging its citizens to invest abroad due to a huge population and dwindling resources.

“Most of these traders have certain goals to achieve, they would do anything to make money and send it back home to support their families and indirectly contribute to the [Chinese] economy,” says Ngowi.

He says that the sale of counterfeit goods has a direct effect, not only on intellectual property rights, but also on the economy and social structures.

“If we are not careful we will end up being losers because Chinese traders have made third world countries a testing ground for their commodities which could not otherwise be accepted elsewhere.”

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Where Banks Need Less Regulationhttp://www.ipsnews.net/2013/08/where-banks-need-less-regulation/?utm_source=rss&utm_medium=rss&utm_campaign=where-banks-need-less-regulation http://www.ipsnews.net/2013/08/where-banks-need-less-regulation/#comments Wed, 14 Aug 2013 08:44:13 +0000 John Fraser http://www.ipsnews.net/?p=126494 The extent to which banking services are available freely between SADC states differs across the various products offered and the clients served by banks. Credit: Kristin Palitza/IPS

The extent to which banking services are available freely between SADC states differs across the various products offered and the clients served by banks. Credit: Kristin Palitza/IPS

By John Fraser
JOHANNESBURG , Aug 14 2013 (IPS)

Leading bankers are concerned that the regulatory environment in some southern African states is preventing them from offering a full range of services to individuals and companies across the region.

Efficient and affordable financial services are crucial to both the development of businesses and infrastructure projects within the Southern African Development Community [SADC] – and in expanding the reach of banking to the millions who are currently outside the system.

The concerns are being raised ahead of the SADC heads of state and government meeting in Lilongwe, Malawi, on Aug. 17 and 18.

The group chief executive officer of BancABC Douglas Munatsi told IPS that, on the surface, the banking rules in SADC states are similar, as they all stem from the Basel guidelines, an international regulatory framework for banks.

“However, the reality is that some regulators don’t apply the rules the same way, on issues such as the minimum capitalisation of a bank,” he said.

“Sometimes the process is not as transparent as it should be. A country may have very positive investment rules, but labour laws can be very rigid, such as those covering expatriates in Botswana.”

The group chief executive officer of BancABC Douglas Munatsi said that banking rules in SADC states are similar on the surface. But in reality all regulators did not apply the same rules. Credit: John Fraser/IPS

The group chief executive officer of BancABC Douglas Munatsi said that banking rules in SADC states are similar on the surface. But in reality all regulators did not apply the same rules. Credit: John Fraser/IPS

He said that if a bank extended its reach across the region, it needs to be able to deploy people into new territories, but this is not always easy.

“This affects us, as we find limited skills in some places, but we are only allowed to move in a certain number of staff,” he said. “The regulatory environment in some countries is still relatively weak...Political uncertainty in countries like Zimbabwe is another matter of concern.” -- Cas Coovadia, the managing director of the Banking Association of South Africa

Mike Brown, the chief executive officer of Nedbank, one of South Africa’s biggest banks, agreed that there are inconsistencies.

“The extent to which banking services are available freely between SADC states differs across the various products offered and the clients served by banks,” he told IPS.

“In wholesale banking [bank services for companies] for example, the growing trade between SADC countries has resulted in banks developing trade finance solutions to facilitate the ease of intra-regional trade.”

Brown noted that there has been “more limited” progress in providing banking services to ordinary customers because of a failure to harmonise regulations across SADC. He also cited exchange controls as an obstacle to expansion.

Brown said that migrant workers, such as miners from neighbouring countries who work in South Africa, need to be able to send funds across borders to support their families back home.

“Companies have emerged that provide cross border money remittance solutions. These include mobile operators and money remitting companies [such as Western Union and Moneygram]. The cost of these services is still, however, high and prohibitive for many people – and not highly utilised,” he warned.

And in some cases banks are not open to providing services for rural women.

Forty-year-old Vivian Zivira, an agro-dealer from Nyanga in Zimbabwe’s Manicaland province says many women like her with communal land face significant challenges to secure loans to start income-generating programmes.

She says that this is because Zimbabwean banks take too long to process their applications, and charge high interest rates.

“It took me about six months to access my first loan because the banks wanted collateral, which I eventually provided through my husband. They gave me 5,000 dollars with 25 percent interest. Despite a very good repayment record, the bank could not increase the second loan,” Zivira told IPS.

But Cas Coovadia, the managing director of the Banking Association of South Africa, said he believed there were no major issues affecting the offering of banking services between states.

“The SADC Banking Association has been working with the SADC Committee of Central Bank Governors to develop an integrated payments and settlement system, which will improve banking across states substantially,” he told IPS.

However, he did warn that “the regulatory environment in some countries is still relatively weak. Infrastructure is another issue, particularly telecommunications. Political uncertainty in countries like Zimbabwe is another matter of concern.”

The chief operating officer of First National Bank Africa, Leonard Haynes, agreed that sound infrastructure plays a big part in a bank’s ability to make its services available, and he highlighted the importance of telecommunications and stable electricity.

He also suggested that the unavailability in some places “of personal identity documents or similar reliable forms of identification makes it a challenge to comply with ‘know your customer’ requirements.”

“Credit bureaus in some of these countries are generally not in existence, or are not reliable yet as a reference point, to provide customer information on which credit decisions can be based,” he told IPS.

Brown said that the different regulatory environments in different states “present a challenge in managing regional operations, by limiting the economies of scale that can be achieved across the border.

“For example, some countries require banking technological systems to be located in that particular country. This results in the need to duplicate infrastructure across a number of countries and increases the operating costs and eventual costs to customers,” Brown said.

He noted that some countries are changing their regulatory rules, and that this can provide both challenges and opportunities.

“For instance, Zimbabwe and Zambia have increased the minimum capital requirements for banks. An unpredictable regulatory environment contributes to the complexity of managing operations in multiple countries, particularly if this is combined with an unclear level of indigenisation.”

He said that one would expect that as the ease of doing business in the various countries improves, and the operating environment is harmonised, this would result in greater investment across the borders and more substantive regional strategies.

* Additional reporting from Michelle Chifamba in Harare.

 

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China Trade Deal Raises Hackles in Taiwanhttp://www.ipsnews.net/2013/08/china-trade-deal-raises-hackles-in-taiwan/?utm_source=rss&utm_medium=rss&utm_campaign=china-trade-deal-raises-hackles-in-taiwan http://www.ipsnews.net/2013/08/china-trade-deal-raises-hackles-in-taiwan/#comments Tue, 06 Aug 2013 07:12:05 +0000 Dennis Engbarth http://www.ipsnews.net/?p=126288 By Dennis Engbarth
TAIPEI, Aug 6 2013 (IPS)

A broad coalition of Taiwanese labour, human rights and other civil society organisations are campaigning to block legislative ratification of the controversial Cross-Strait Services Trade Agreement signed Jun. 21 by representatives of Taiwan and China.

The signing of the pact in Beijing, a continuation of the Cross-Strait Economic Cooperation Framework Agreement (ECFA) signed in June 2010, sparked a two-day occupation of the legislative podium by opposition Democratic Progressive Party and Taiwan Solidarity Union lawmakers.

The boycott ended only after all legislative caucuses agreed that the agreement would be reviewed line by line instead of being rammed through a ratification vote, as desired by the rightist Chinese Nationalist Party (Kuomintang or KMT) government.“But we are more concerned with the likelihood that China’s state enterprises will use their capital to buy up neighbourhood beauty parlours and hair dressing salons...” -- Cosmetology and Hair Vocational Association chairman Peter Ku Wen-fa

President and ruling KMT Chairman Ma Ying-jeou and other officials maintain that the new deal is in Taiwan’s favour since it would open 80 service product lines for Taiwan companies in China compared to 64 service industries in Taiwan listed for market liberalisation for investors and service providers from the Peoples Republic of China.

A post-signing impact study by the Chung-Hua Institution of Economic Research commissioned by the Ministry of Economic Affairs released Jul. 16 forecast that the pact would lift economic growth by between 0.025-0.034 percentage points and provide over 11,000 new service sector jobs over the next decade.

Among the sectors to be opened up to Chinese investment and experts are financial services, hotels and restaurants, printing, consumer services such hairdressing and beauty parlours, wholesale commerce, transportation services, construction, telecommunications and many social services including care services for handicapped and elderly citizens.

However, a wide range of economists, labour and human rights organisations, small entrepreneurs and cultural figures together with opposition parties warn that the new pact will harm the interests of Taiwan workers and small businesses and to democratic freedoms out of proportion to its anticipated benefits.

During a rally in front of the Legislative Yuan Jul. 28, Cross-Strait Agreement Watch Alliance Convenor Lai Chung-chiang announced the official formation of the Democratic Front against the Black-Box Cross-Strait Services Trade Agreement composed of a coalition of labour, human rights, environmental, social welfare and media reform organisations.

Critics have concentrated their fire on the lack of transparency in the negotiations, the asymmetrical liberalisations to China’s benefit and the impact on Taiwan society, culture and national security of deeper links with China’s party-state dominated economy.

The government did not conduct any comprehensive impact assessment or hold any substantive dialogue with industry associations, labour unions or legislators before signing this pact, Taiwan Labour Front secretary-general Sun Yu-lien told IPS.

National Taiwan University department of economics chairwoman Prof. Cheng Hsiu-lien told IPS that most of the market liberalisations offered by China have preconditions while most Taiwan’s market openings for Chinese companies are unconditional.

Cheng noted that Taiwan e-commerce ventures will not be allowed to directly offer cross-border services, but will have to set up joint ventures in China’s Fujian Province and apply for licences which would ban content contrary to Chinese policies, such as Beijing’s claim that Taiwan is part of Chinese territory.

Taiwanese e-commerce enterprises will be forced to take their capital, staff and knowhow to China and will also be forced to engage in self-censorship, warned Cheng.

Hong Yi Travel Services co-chairman Jack Tsai Chia-huang told IPS that the new pact would let Chinese companies set up a vertically integrated system of travel agencies, hotels, transportation, restaurants and retail stores that would monopolise the cash flow from Chinese tourism and let the Taiwan people bear the costs to the environment.

Cosmetology and Hair Vocational Association chairman Peter Ku Wen-fa told IPS that officials affirm that Chinese workers will not be imported and so they will have to worry about their jobs.

“But we are more concerned with the likelihood that China’s state enterprises will use their capital to buy up neighbourhood beauty parlours and hair dressing salons and our beauticians or hair stylists will become employees in Chinese state enterprises.”

Even businessmen eager to expand into the China market were dismayed.

Locus Publishing Company chairman Rex Hau Ming-yi said in a news conference Jul. 27 that government negotiators had failed to press Beijing to allow Taiwan publishers and printers access to book and magazine publishing licences, but agreed to permit Chinese state-owned publishing groups invest in Taiwan’s printing and wholesale market.

Taiwan publishers will be squeezed if Chinese state companies gain control over printing and wholesaling and will be subject to self-censorship, said Hou, who added that the result would be the erosion of freedom of thought and cultural diversity in our own civil society.

National Taiwan University professor of economics Lin Shang-kai told IPS that the new pact will spark another wave of migration of capital, talent and knowhow to China and thus further push down investment, employment, wages and consumption in our own economy.

A survey of 1,008 Taiwan adults released in late July by Taiwan Indicators Survey Research found that 48 percent opposed signing the services trade pact, while 34 percent were in favour. These figures reflect a reversal three years ago, when 47 percent supported signing an ECFA compared to 32 percent who opposed.

The impact of the backlash was shown when Taiwan’s 113-member national legislature began a two-week special session Jul. 29 during which the KMT had initially aimed to secure ratification of the pact.

Instead, while the civic alliance held protests against the pact outside the Legislative Yuan complex, party caucuses agreed to submit the pact to review by a legislative committee in September.

Taiwan Democratic Watch president Hsu Wei-chun told IPS that the delay shows that citizen pressure can have impact as many KMT lawmakers are aware that citizens on the streets and voters in their districts are very worried.

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Chinese Built Port Leaves Cameroonians Adrifthttp://www.ipsnews.net/2013/08/chinese-built-port-leaves-cameroonians-adrift/?utm_source=rss&utm_medium=rss&utm_campaign=chinese-built-port-leaves-cameroonians-adrift http://www.ipsnews.net/2013/08/chinese-built-port-leaves-cameroonians-adrift/#comments Thu, 01 Aug 2013 08:04:06 +0000 Monde Kingsley Nfor http://www.ipsnews.net/?p=126169 Kiribi is a local beach resort town, but a mega 567-million dollar seaport is being built there. However, analysts caution that locals will miss out on important employment opportunities because of a lack of skills. Credit: TheMaramatanga/CC by 2.0

Kiribi is a local beach resort town, but a mega 567-million dollar seaport is being built there. However, analysts caution that locals will miss out on important employment opportunities because of a lack of skills. Credit: TheMaramatanga/CC by 2.0

By Monde Kingsley Nfor
YAOUNDE, Aug 1 2013 (IPS)

The Kribi Seaport on the coast of southern Cameroon is destined to become a mega harbour to serve all of Central Africa. But there is little chance that locals, particularly engineers and scientists, will benefit much from the 567 million dollar development. 

With Cameroon only providing 15 percent of the construction cost and China funding the remaining 85 percent, the port is presently under construction by the China Harbour Engineering Company.

But experts say that Cameroonians lack the professional training that is needed to work on these projects and will miss out on important employment opportunities.

“Despite Chinese investment in terms of infrastructure and technology, [this will not] benefit the growing educated and unemployed population in Cameroon who lack the appropriate professional training to be absorbed by these projects. At the moment the country needs … engineers, doctors, and scientists,” Mengnjo Anselm Sahngeh, an economic policy analyst in Cameroon, tells IPS."The Kribi Seaport could be a real lever to the industrialisation of Cameroon and the competitiveness of its products as the country will remain a regional access door to the sea for countries like Chad and Central African Republic." -- economic policy analyst Mengnjo Anselm Sahngeh

The World Bank’s 2009 Cameroon Economic Update stated that the country has an unemployment rate of 30 percent, most of whom are unemployed youth with either degrees or diplomas from higher education institutions.

According to the organisation’s 2013 Cameroon Economic Update Reducing Poverty, Vulnerability, and Risks – Special Issue on Social Safety Nets, this country’s economy grew five percent in 2012. But its overall poverty rate, which is close to 40 percent, has not declined but actually increased in some areas.

“Poor infrastructure, an unfavourable business environment, and weak governance continue to hamper economic activity and make it difficult to reach the growth rates needed to reduce poverty in a sustainable manner,” the report stated.

The deep-sea harbour, which is situated in the south region’s beach resort town Kribi, currently employs 1,125 people, 609 of them Cameroonians mostly employed as manual labourers.

Daline-Louise Nsomotto of the Kribi seaport project coordination unit in the ministry of economy, planning and regional development tells IPS that the port will handle import and export of heavy goods.

“This will fill the gaps of the [neighbouring] Douala seaport, which is only six to seven metres in depth and can only receive vessels with a capacity of 15,000 tonnes. Upon completion, the main port in Kribi, which is 16-25 metres in depth, will receive big vessels of close to 100,000 tonnes,” Nsomotto says.

An industrial complex that will allow for a multipurpose docking port with 20 different terminals, an air base, an industrial site and a private residential area is also being built. “It is a new city that will be established,” Nsomotto adds.

Frank Guet is a local businessman in Kribi. He says that despite the fact that Cameroonians had little to do with the development of the port, which started in December 2010, it had improved business in the town.

“The seaport project has increased business and employment opportunities in this zone although prices of particular commodities, such as land and houses, have skyrocketed. Many are migrating towards the area where the port is being constructed demanding land for acquisition,” Guet tells IPS.

Nsomotto says that the project’s priority is to use local skilled workers. “But local training schools do not satisfy the need of the present projects in Cameroon.

“However, the transfer of technology is highly recommended by the government to enable continuity by local engineers after the project is delivered. To achieve this, we encourage the few young Cameroonian engineers to be [employed] alongside the foreign experts from China and other countries on the project,” Nsomotto says.

According to the United Nations Industrial Development Organisation, Cameroon currently ranks 63rd of 74 developing countries in terms of the level of technical skill development in the country.

Sahngeh points out that many developing countries are skipping the necessary steps of development and moving straight to large-scale industrialisation without building the essential institutions or training people to accommodate these developments.

David Esseck Sany, director of training and professional orientation at the ministry of employment and vocational training tells IPS that Cameroon suffered the consequences of the brain-drain that is still plaguing most African countries.

“There is a gap in Cameroon in terms of trained engineers and technical professionals. In order to fill these gaps we are urging and even forcing firms to train their own workers to fit the needs of the industry.”

According to Sany, most of the large projects being built in Cameroon are in areas of work that demand the type of technical expertise that cannot be found locally.

“Many higher learning institutions are being oriented today by the government to offer training in areas such as mining, high-tech engineering, energy, water and agriculture. This is to enable the implementation of the 30/70 law [of hiring 30 percent of foreigners and 70 percent of Cameroonians on a project] in all industries as much as possible,” Sany adds.

But the transfer of skills to Cameroonians might still be difficult to achieve on Chinese-driven projects where it is reported that Chinese workers even undertake basic tasks like driving trucks.

“It is very difficult to work with the Chinese when you don’t understand their language. [However], many Cameroonians are now learning the language in order to be incorporated in their projects,” Sany explains.

Regardless of the Kribi seaport’s shortfalls, Sahngeh says that the project remains a great opportunity for the socio-economic development of the region.

He says no sub-regional community can prosper without reliable infrastructural linkages and no country can be industrialised without a viable port infrastructure, be it sea or air.

“The first phase of the project is 60 percent completed and, once realised, the Kribi port will become a hub of economic and trade activities in the whole region… The Kribi seaport could be a real lever to the industrialisation of Cameroon and the competitiveness of its products as the country will remain a regional access door to the sea for countries like Chad and Central African Republic,” he says.

However, he cautions that this will be difficult unless Cameroonians receive the necessary skills and training to benefit from this. “It is unclear how this is logistically possible given the shortage of Cameroonians available to fulfil roles requiring technical skills that could attract foreign investment and foreign companies to engage in joint ventures with locals,” Sahngeh says.

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Voting to Save Zimbabwe’s Economyhttp://www.ipsnews.net/2013/07/voting-to-save-zimbabwes-economy/?utm_source=rss&utm_medium=rss&utm_campaign=voting-to-save-zimbabwes-economy http://www.ipsnews.net/2013/07/voting-to-save-zimbabwes-economy/#comments Tue, 30 Jul 2013 07:50:44 +0000 Jeffrey Moyo http://www.ipsnews.net/?p=126117 Prime Minister Morgan Tsvangirai at a party rally on Jul. 29, 2013, two days before Zimbabwe’s election. Economists say that it does not matter who wins the country’s Jul. 31 election as none of the political parties may be able to reverse the country’s economic meltdown. Courtesy: Jeffrey Moyo

Prime Minister Morgan Tsvangirai at a party rally on Jul. 29, 2013, two days before Zimbabwe’s election. Economists say that it does not matter who wins the country’s Jul. 31 election as none of the political parties may be able to reverse the country’s economic meltdown. Courtesy: Jeffrey Moyo

By Jeffrey Moyo
HARARE, Jul 30 2013 (IPS)

At a recent campaign rally in Zimbabwe’s Midlands Province, Prime Minister Morgan Tsvangirai pledged to establish rural-based companies to create employment. It was a promise that appealed to 34-year-old sociologist Agnes Ngwenya who graduated from the University of Zimbabwe 10 years ago, but has not yet found work.

She broke into song and ecstatic ululation, as she jumped and gyrated with optimism, waving a red flag – a distinctive trademark of the Movement for Democratic Change – Tsvangirai (MDC–T).

MDC–T promises to create a 100-billion-dollar economy by 2018, anchored by foreign direct investment. Meanwhile the splinter MDC–Ncube, led by Professor Welshman Ncube, pins its campaign on devolution, or decentralising governance.

“Believing that the Zimbabwe Africa National Union-Patriotic Front (Zanu–PF) 2013 campaign manifesto will one day transform the lives of many suffering Zimbabweans after the party’s three decades in power is a definite impossibility and absolutely untrue,” Ngwenya tells IPS.“We strongly believe that we no longer need a government of national unity, because it hampers our economic growth." -- Zimbabwe National Chamber of Commerce president Davison Norupiri

Zimbabweans go to the polls on Wednesday Jul. 31, amid reports of intimidation, threats of violence and abductions. But economists here say that it does not matter whether Tsvangirai’s MDC–T or President Robert Mugabe’s Zanu–PF wins the election, neither will be able to reverse Zimbabwe’s economic meltdown anytime soon.

Economist Kingston Nyakurukwa says that both parties have unrealistic plans for solving Zimbabwe’s economic problems.

“While I agree that MDC–T seems to have a better plan to rescue the country from a decade-long economic crisis, generally manifestos pencilled by the parties set to lock horns at this years’ elections are unrealistic, exaggerated and reflect the ambitiousness of the parties racing to govern this country rather than the pragmatic means to arrest the country’s economic woes,” Nyakurukwa tells IPS.

Between 2003 and 2009, this Southern African nation’s year on year inflation was reported as 231 percent. The Reserve Bank of Zimbabwe was forced to issue a 100 trillion Zimbabwean dollar note and eventually the central bank stopped printing money in 2009, opting to adopt a multi-currency regime. Not only that, unemployment is ridiculously high. A 2009 report by the United Nations Office for the Coordination of Humanitarian Affairs stated that the country’s unemployment rate was 94 percent. A great majority now work in the informal sector.

Much of the country’s economic meltdown has been blamed on Mugabe’s policies, which include a controversial land reform programme that began in 2000 and saw over 300,000 people forcefully occupy land previously owned by an estimated 4,000 white commercial farmers.

Another controversial policy area is foreign investment.

Though for 21-year-old Evelyn Chatsi from Mwenezi district, about 144km southwest of Zimbabwe’s oldest town of Masvingo, it is not controversial at all. She feels it is a solution for her improved economic future.

“I know Zanu–PF will not betray young people. The party crafted the indigenisation policy to empower youths like us and come Jul. 31, our lives will be changed, with President Robert Mugabe back at the helm of leadership,” Chatsi tells IPS.

Movement for Democratic Change – Tsvangirai rally on Jul. 29, 2013, two days before Zimbabwe’s election. Credit: Jeffrey Moyo/IPS

Movement for Democratic Change – Tsvangirai rally on Jul. 29, 2013, two days before Zimbabwe’s election. Credit: Jeffrey Moyo/IPS

Under the Indigenisation and Economic Empowerment Act of 2007, foreign-owned companies are required to sell a 51 percent stake to locals to stimulate economic growth.

But some financers fear losing their investments through this policy. Independent economic analyst John Robertson says it has scared away investors and led to several companies closing down after being taken over by locals.

“With indigenisation, we have attracted very little new investments here and caused closure of several companies that offered employment to many people here,” Robertson tells IPS.

According to the Consumer Council of Zimbabwe, 85 companies closed down in Harare last year and over 100 shut down in Bulawayo between 2009 and 2013.

Araj Mouri, a Zimbabwean-based Indian businessman, tells IPS: “We definitely can’t trust a party whose aim is to have its hands on our investments without bringing its own capital. We are therefore watching this election drama with scepticism.”

Claris Madhuku, director of Platform for Youth Development, a democracy lobby group, agrees that Zanu–PF’s indigenisation and economic empowerment policy has failed and says that is has caused “mayhem in the country, with many people linked to it scrambling to grab foreign-owned companies.”

“While MDC-T’s manifesto is reasonable, [it is] too ambitious, which may also be difficult to implement. The political parties want power; they don’t mean what they say,” he tells IPS.

Charles Msipa, president of the Confederation of Zimbabwe Industry, says Zimbabwe really needs a government with a consistent policy framework that addresses the country’s economic opportunities and challenges.

“But whether that policy environment is delivered by a coalition or single-party government, it’s for the electorate to decide,” Msipa tells IPS.

However, the Zimbabwe National Chamber of Commerce president Davison Norupiri says another coalition government would stifle economic growth. After the violence that followed Zimbabwe’s disputed 2008 election, Zanu–PF and MDC–T signed a pact to form a government of national unity with elections this year.

“We strongly believe that we no longer need a government of national unity, because it hampers our economic growth. With our [unity government] here, we haven’t moved much in terms of economic development,” Norupiri tells IPS.

Mike Milton, who runs a plastics manufacturing company in Harare, is also not sure that either party has a concrete solution to save the economy.

“Both MDC-T and Zanu-PF election manifestos lack pragmatic means to arrest the country’s decade long economic woes. They are not clear on how they aim to practically restore investor confidence,” Milton tells IPS.

“But if we have another disputed election, another coalition government may be unwelcome, which will throw this country into a serious and irretrievable economic morass,” he says.

But Prosper Chitambara, an economist with the Labour and Economic Development Research Institute Zimbabwe, an independent economic research think tank, says he doubts that Zanu–PF’s manifesto would yield any positive changes if the party won the elections.

“In its manifesto, Zanu-PF carries the same old story and I don’t think they will change the way they have been doing things for the past [three decades] even if they may win this election. What they are saying in their campaign manifesto only helps to weaken the value of the national assets and in this case, Zanu-PF’s manifesto is more ambitious than the MDC-T one,” Chitambara tells IPS.

“But I think under an MDC government, we shall see numerous positive transformations and developments hence people have so much expectations,” says Chitambara.

An African Union election observer speaking to IPS in Harare on condition of anonymity says political uncertainty has been the biggest factor in crippling Zimbabwe’s bid to grow its economy.

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Southern African Trade Talks Stall, and the Clock Tickshttp://www.ipsnews.net/2013/07/southern-african-trade-talks-stall-and-the-clock-ticks/?utm_source=rss&utm_medium=rss&utm_campaign=southern-african-trade-talks-stall-and-the-clock-ticks http://www.ipsnews.net/2013/07/southern-african-trade-talks-stall-and-the-clock-ticks/#comments Fri, 19 Jul 2013 05:50:50 +0000 Servaas van den Bosch http://www.ipsnews.net/?p=125848 Fisheries contribute at least 10 billion dollars to African economies every year and in Angola and Namibia they are vital economic drivers. Fishermen carry their boat in from the sea in Doring Bay, 350km north of Cape Town. Credit: Patrick Burnett/IPS

Fisheries contribute at least 10 billion dollars to African economies every year and in Angola and Namibia they are vital economic drivers. Fishermen carry their boat in from the sea in Doring Bay, 350km north of Cape Town. Credit: Patrick Burnett/IPS

By Servaas van den Bosch
WINDHOEK, Jul 19 2013 (IPS)

Southern Africa has to settle in for another round of negotiations after talks on Economic Partnership Agreements failed to produce results in June, bringing countries closer to losing access to the lucrative European Union market.

A high-level visit to the region by EU Trade Commissioner Karel de Gught this week highlighted there are still many differences.

The troublesome trade negotiations between the EU and the Southern African Development Community (SADC)–EPA grouping that includes Botswana, Lesotho, Namibia and Swaziland (BLNS), as well as Angola, Mozambique and South Africa, have stretched five years past their 2008 deadline.

South Africa joined the negotiations two years back and is looking to improve the terms it has under the Trade and Development Cooperation Agreement, especially for agricultural products.

For the BLNS, which import about 80 percent of their trade from the continent’s economic powerhouse and are joined with Pretoria in the Southern African Customs Union (SACU), the entry of South Africa on the scene presents dilemmas, as well as opportunities for further negotiation and regional economic integration.

As the two economic heavyweights – South Africa and the EU – face it off, the smaller countries are stuck in the middle. From Jun. 14 to 21 senior officials talked in Brussels about clinching the long-awaited trade deal, but little progress was made.

“Basically we are where we were last year, nothing has changed in Brussels that would close the deal,” commented Rejoice Karita, senior trade advisor at the Agricultural Trade Forum, a Namibian company representing  the agricultural industry.

An impasse in the trade talks occurred between the EU and South Africa when the former indicated that the South Africans had not offered enough in terms of agricultural market access. The EU had requested market access for 67 tariff lines, but South Africa only conceded on 20 lines and put tariff rate quotas on some of them. According to negotiators, the EU responded that the offer fell short of closing the gaps in market access regulations and they needed to see improvement.

This stalemate jeopardises the discussion on agricultural safeguards, which are extremely important for the smaller economies in the region. Such safeguards allow countries to increase duties or put in place quotas if a sudden surge in imports threatens local agricultural production. The EU will need to see concessions on South African market access to give the green light for agricultural safeguards. But both parties are unwilling to move, with the South Africans keen to protect their dairy industry and processed products such as ham and confectionaries.

According to Karita, the next round of talks in September and October will be crucial. “The two blocs have strong positions and there is little movement forward. From the side of the European Commission new articles are being added to the text. Such negotiation tactics delay the process and eventually Namibia could be the odd one out,” she told IPS.

A major stumbling block is the issue of export taxes. Facing competition from China, the EU is eager to lock in raw materials, but the developing economies of Southern Africa want to be able to impose taxes to divert exports for local value addition and developing of the local economy.

European Union Trade Commissioner Karel de Gught was in Namibia and South Africa this week and said that the matter of export taxes is almost resolved with only industrial export taxes outstanding. Credit: Servaas van den Bosch/IPS

European Union Trade Commissioner Karel de Gught was in Namibia and South Africa this week and said that the matter of export taxes is almost resolved with only industrial export taxes outstanding. Credit: Servaas van den Bosch/IPS

De Gught told IPS during a visit to the Namibian capital, Windhoek, that the matter of export taxes is almost resolved with only industrial export taxes outstanding. But Namibian negotiator Permanent Secretary Dr. Malan Lindeque said the issue cannot be merely ‘brushed aside’.

“Export taxes are a crucial issue for Namibia. We are primarily exporters of raw materials and need to reverse that situation. It’s crucial we move toward more explicit provisions on export taxes that meet our needs,” Lindeque told IPS.

Lindeque lamented an October 2014 deadline Europe imposed on the talks, after which Namibia will lose preferential market access.

“Because of this unfortunate deadline some circumstances cannot be properly accommodated in the talks. Still, we will only sign an agreement that is in our long term interest.”

He also warned that increased access of European agricultural goods into South Africa plays out in the Namibian market through the Southern African Customs Union.

“Already European products are extremely competitors. It is cheaper to import basic foodstuffs from Europe than to produce them locally. It is always an uphill battle for our producers to get their products on the local shelves let alone export them into the region,” he said.

In trying to reassert its grip on Southern Africa, Europe is trying to find the right tone. But the talks remain riddled with paranoia and accusations and the visit of De Gught made it clear that many stumbling blocks remain.

The latest round of talks in June were preceded by a courtesy call to Namibia by the Angel Carro, head of division for Southern Africa in the European External Action Service. The visit backfired somewhat as Carro, who came to extend the hand of friendship, was unceremoniously, and perhaps unfairly, labelled a “euro thug” by commentators when conceding in an interview that aid to Namibia would be reduced on the basis of its growing economy and upper middle-income status. In 2011 the World Bank reclassified Namibia as a middle-income country as its per capita income is 4,700 dollars. World Bank figures show that growth reached 4.9 percent in 2012.

The status of the former colonial masters has been dented in the region since the Eurozone crisis and some of the countries negotiating in the SADC–EPA, most notably Botswana, are faring much better than a couple of the EU member states.

On the other hand, growth in South Africa is stalling, coming in at a modest 2.5 percent last year, half that of Namibia. With a weakening exchange rate and investors shunning the country, because of labour unrest and political uncertainty, South Africa is painfully reminded it is still a deal-taker in the global economy and does not yet set the agenda for the continent.

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Small Businesses Tackle Poverty in Mauritiushttp://www.ipsnews.net/2013/07/small-businesses-tackle-poverty-in-mauritius/?utm_source=rss&utm_medium=rss&utm_campaign=small-businesses-tackle-poverty-in-mauritius http://www.ipsnews.net/2013/07/small-businesses-tackle-poverty-in-mauritius/#comments Thu, 11 Jul 2013 09:21:43 +0000 Nasseem Ackbarally http://www.ipsnews.net/?p=125631 Since Mauritius eased the procedures for obtaining a business permit a year ago, small businesses are cropping up all over the island. People have started selling food, vegetables, fruits, small luxurious items and clothes. Credit: Nasseem Ackbarally/IPS

Since Mauritius eased the procedures for obtaining a business permit a year ago, small businesses are cropping up all over the island. People have started selling food, vegetables, fruits, small luxurious items and clothes. Credit: Nasseem Ackbarally/IPS

By Nasseem Ackbarally
PORT LOUIS, Jul 11 2013 (IPS)

Raja Venkat, a food vendor on the sidewalk of Immigration Square in the centre of Port Louis, the Mauritian capital, sits on his tricycle with a bag full of dhal puris - small, round, flat Indian bread stuffed with pulses which he sells together with tomato sauce and bean curry.

“Come and taste my dhal puris, you’ll want more. Come, come,” he shouts.

Thousands of small businesses like this have sprung up in every town and village on the island since the government eased the procedures for obtaining a business permit a year ago.

“At times, I helped in masonry, in vegetable transportation or washing vehicles. I was available for any job, but most of the time I was unemployed,” Venkat tells IPS. “Net employment creation in small and medium business between 2000 and 2011 is estimated to be 67,800, i.e., an increase of more than 36 percent, as compared to an increase of 14,400 in large establishments.” -- Mauritian Minister of Business, Enterprise and Cooperatives Jim Seetaram

The unemployment rate stood at 8.6 percent at the end of 2012, according to figures obtained from Statistics Mauritius, the official organisation responsible for collection, compilation, analysis and dissemination of statistical data. And the easing of procedures for obtaining a business permit has been aimed at reducing unemployment in this Indian Ocean island. Official figures from Statistics Mauritius indicate that the total number of business activities increased from 133,723 to 138,236 in 2012.

Since he started his small business six months ago, after paying the required fee (about 50 dollars a year to the Municipality of Port Louis) for his business licence, Venkat now has a steady income. His wife, Aashna Venkat, cooks the dhal puris in the small wooden kitchen of their home at Terre-Rouge, four km away.

“I now earn enough to feed the family and also to save some money for the future,” this father of two children, aged six and three years, says.

Many other people have started similar businesses on the island, selling food, vegetables, fruits, small luxurious items and clothes. Some have opened small mechanical workshops where they repair bicycles and motorcycles. Many women, particularly from Muslim families, have developed the art of applying henna to the hands.

Minister of Business, Enterprise and Cooperatives Jim Seetaram tells IPS that there are more workers in these small and medium businesses than in the larger establishments.

“Net employment creation in small and medium business between 2000 and 2011 is estimated to be 67,800, i.e., an increase of more than 36 percent, as compared to an increase of 14,400 in large establishments,” he says.

“Small and medium businesses are the main drivers of job creation and contribute in a significant way to economic growth. They employ around 250,000 people, representing more than 44 percent of the total number of jobs.”

Mauritius Chamber of Industry and Commerce’s chairperson and business consultant Ganesh Ramalingum tells IPS that these microenterprises are very important to the economy because they create jobs.

“A person who has some mechanical skills opens a business of repairing bicycles and motorcycles. He’ll need one or two people to help him … So, many jobs are being created in this way and that’s good for the economy. People who earlier had difficulty earning a living are now creating their own businesses in fields that suit them,” he says.

Local authorities regulate these small businesses. They are not supposed to get involved in any unusual activity in a residential area, or disturb neighbours at unreasonable hours or pollute the environment with dust, fumes or odours. They are required to comply with the guidelines issued by the Fire Services, the Sanitary Authority and the Environment Ministry. But many feel that these small businesses are not complying with the guidelines.

Ganeshen Mooneesawmy, vice chairperson of the District Council of Rivière du Rempart that issues and monitors business permits in the northern part of the island, is happy that these people are working, but finds that many of them lack discipline in running their business.

“They won’t ask for jobs from the government as there (are) none available … (but) they sell food in an unhygienic manner and they disturb the living environment in their area. We have very few staff to keep a check on them,” he tells IPS.

In Goodlands, northern Mauritius, small businesses operate literally on the sidewalks in spite of a law that prevents this. Many of them put their goods in large baskets that they place on wooden or iron stands on the sidewalks.

Ashok (full name not given), a vendor, tells IPS he has to do this to attract clients because his business is very small.

“There is so much competition around from big stalls and also from smaller businesses around. If you don’t fight, you don’t eat tonight,” he says.

Municipal Councillor Kritanand Beeharry of Curepipe, a town in the southern part of Mauritius, chairs the Municipality’s Health and Sanitation Committee. He tells IPS that his staff has inspected some of these small businesses after receiving complaints from residents. “The police is also solicited when the need arises,” he adds.

However, he finds more positive points than negative ones in these modest endeavours, as “these small businesses are easy to manage”.

But councillor Prakash Bhunsee of the Flacq District Council in eastern Mauritius believes the situation has gotten out of control.

“I am afraid the police only check the licences of the small entrepreneurs and is not concerned with health, sanitation, environment or pollution matters,” he says.

The shortage of staff at the municipal inspectorate level makes it obvious that many of these businesses go unchecked for months.

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Saving Côte d’Ivoire’s Fragile Forests and Peoplehttp://www.ipsnews.net/2013/07/saving-cote-divoires-fragile-forests-and-people/?utm_source=rss&utm_medium=rss&utm_campaign=saving-cote-divoires-fragile-forests-and-people http://www.ipsnews.net/2013/07/saving-cote-divoires-fragile-forests-and-people/#comments Tue, 09 Jul 2013 06:40:09 +0000 Marc-Andre Boisvert http://www.ipsnews.net/?p=125548 Ouedrogo Boureila, who has been living in Mount Peko since 2006, fled the area when the security forces entered the area and began registering all inhabitants of the national park. Credit: Marc-André Boisvert/IPS

Ouedrogo Boureila, who has been living in Mount Peko since 2006, fled the area when the security forces entered the area and began registering all inhabitants of the national park. Credit: Marc-André Boisvert/IPS

By Marc-Andre Boisvert
DIX-HUIT MONTAGNES REGION, Côte d’Ivoire, Jul 9 2013 (IPS)

As the Côte d’Ivoire government clears its protected forests of illegal occupiers, particularly in the Dix-Huit Montagnes region, environmentalists say that this crucial move might lead to conflict in an already tense region.

“I am in favour of evictions, but it should not be brutal. These are fragile populations,” Egnankou Wadja Mathieu, professor at the Felix Houphouet-Boigny University’s Department of Botany and director of the NGO SOS Foret, told IPS.

In June, about 25,000 dwellers were violently evicted from the Niegre Forest in the Dix-Huit Montagnes region to the west of the country. Their settlements were destroyed with bulldozers.

Such an aggressive operation was not possible in Mount Peko National Park, which lies 200 km north of Niegre. Mount Peko used to form a chain of mountains covered with luxuriant green forests. Over the last 20 years, however, illegal settlers – the vast majority of whom are non-Ivorian West African citizens – have cut down trees to grow cocoa, destroying almost 70 percent of the 34,000 hectares of protected forest.

Illegal cocoa growers were lucky that this is an isolated reserve with narrow mud tracks that do not allow for heavy machinery or bulldozers.

Still, an operation launched on May 18 shocked some inhabitants of Mount Peko. When Emmanuel Ouedrogo saw Ivorian security forces approaching, he fled. “We had to leave. We do not have the strength to fight back.” The Burkinabe is worried about his future. He already lost some of the crops in its field. “I will lose everything. I do not know where to go next,” he told IPS, his voice shaky.

Ouedrogo Boureila, who has been living in Mount Peko since 2006, fled to Guézon-Tahouaké, a nearby village. “There was no violence when they launched operations. I left Mount Peko voluntarily,” he told IPS, adding that he will not return just yet.

A number of natural forests have been degraded over the course of the years in this West African nation. According to the European Union, more than 75 percent of all Ivorian forests have now disappeared.

“All classified forests will be rid of illegals. We have to stop the desert below the desert,” stated Mathieu Babaud Darret, Minister of Water and Forests, during a press conference on Jun. 13 to launch the voluntary partnership agreement between the EU and Côte d’Ivoire to stop illegal logging.

“Deforestation has a great impact. The forests create a microclimate that allows cocoa to grow. If we cut the forests, cocoa production will fall. And this will also affect fauna, flora, and climate change,” said Mathieu. Cocoa contributes to 10 percent of the country’s GDP and 40 percent of its foreign exchange earnings.

Mathieu said everyone, from forest rangers to local communities, was responsible for the degradation of the country’s forests.

But the situation in Mount Peko is a complicated one. The security forces were largely in the national park to arrest militia leader Amade Oueremi for his role in the country’s 2010–2011 post-election violence. More than 3,000 people died in Côte d’Ivoire after former President Laurent Gbagbo refuse to concede victory to Alassane Ouattara and relinquish power after a contested poll in November 2010.

Oueremi was said to have used the area as a base for more than 20 years and his heavily-armed lieutenants are still in the forest. Many believe that their expulsion could lead to more violence.

The Authority for Disarmament, Demobilisation and Reintegration (ADDR), a governmental agency, is now registering all inhabitants of Mount Peko and disarming the militiamen among them. The government has told illegal forest dwellers that they can remain in the forest until the completion of this three-month registration operation, which will ultimately result in their relocation.

“The situation is under control. The majority of settlers went back to Mount Peko,” Gbane Mahama, the Prefect of Bangolo, who is regarded as the highest authority of the region, told IPS. “We need to work in cooperation with populations to find a sustainable solution.”

Retired Colonel-Major Patrice Kouassi, who supervised the ADDR operation, said that evictions needed to be carefully planned to avoid a crisis. “Relocating those people is a serious challenge. It will be difficult to evacuate people who have been living there for over 10 years and have economic interests.”

There is no census on how many people will have to be relocated from Mount Peko, but local officials believe there are about 20,000 people living in the national park, which has been a protected area since 1968.

“There is no land for agriculture in the region. This is why they settle in the forest,” explained Mathieu. The problem of lack of land and property titles has led to several violent clashes between native ethnic groups and foreign settlers who came from neighbouring countries to farm cocoa.

Robert Kouhi Dje, the traditional chief of Guézon-Tahouaké fears the potential for violence. “The village feels insecure,” he told IPS. And the heavy military presence does not reassure him. Among the settlers are several militias who were active during violent conflicts here over the last decade, notably an attack against the western city of Duekoue where more than 300 were killed during the post-electoral crisis.

Signs of rising tension are already appearing. A recent increase in road robbery and crime has led some locals to blame the Mount Peko squatters, but there is little proof so the blame game between the local communities and foreign settlers continues.

“We have to be careful not to blame blindly. We have no idea how many men carry weapons. But we cannot live with a state within the state. It is time to act sensibly now. For our future.”

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Dreaming Big – But Who Will Fund Southern Africa’s Infrastructure Plans?http://www.ipsnews.net/2013/06/dreaming-big-but-who-will-fund-southern-africas-infrastructure-plans/?utm_source=rss&utm_medium=rss&utm_campaign=dreaming-big-but-who-will-fund-southern-africas-infrastructure-plans http://www.ipsnews.net/2013/06/dreaming-big-but-who-will-fund-southern-africas-infrastructure-plans/#comments Fri, 28 Jun 2013 14:32:27 +0000 Jinty Jackson http://www.ipsnews.net/?p=125303 charcoal riders

By Jinty Jackson
MAPUTO, Jun 28 2013 (IPS)

Mounds of sand and rubble are what are left of sections of Maputo’s beachfront road as bulldozers, manned by Chinese construction workers, tear up the road that is being rebuilt. Southern Africa is under construction and the reminders are everywhere.

Amid the dust and earth-moving equipment, delegates from across the southern African region are gathering in the Mozambican capital Jun. 27-28 at the Southern African Development Community (SADC) Infrastructure Investment meeting to try to galvanise the funding needed for an ambitious cross-border infrastructure network that will help make the region globally competitive.

Over the next 15 years SADC wants to set in motion an extensive revamping of existing infrastructure as well as building new logistics, including hydro-dams, power transmission lines, roads and railways, while boosting internet connectivity and broadband access across the region.

An estimated 64 billion dollars are urgently needed to fund the first phase of an “Infrastructure Master Plan” SADC adopted at a 2012 summit in Maputo and wants to start putting into motion. Over the next 15 years the total cost of infrastructure projects could run to 500 billion dollars.

“This number can be frightening, but if we do not invest now we will jeopardise our trade capacity,” SADC secretary-general Tomaz Salomao admitted. “We have decided to do it now.”

Poor infrastructure is seen as the biggest hurdle to economic growth across the region. Investors complain that weak infrastructure is one of the main pitfalls to operating in the region. In 2009, the World Bank estimated that the “infrastructure gap” cut two percent off national growth figures in the region per year.

How SADC will raise money to fund what is needed is the big question. Several countries have already set aside big amounts for infrastructure; South Africa committed 400 billion dollars in 2012. Regional integration is an obvious way to cut the cost of doing business for everyone.

For development financiers like the Development Bank of Southern Africa, the assurance that governments are prepared to work together on major cross-border projects is half the battle won.

“For us as bankers that is a critical part. When we look at projects the first thing we look at is, does it have sponsor support from various governments? If you have that, you have ticked a major box,” the general manager of the Development Bank of Southern Africa’s Project Fund, Mohale Rakgate, told IPS.

The needs are enormous, and nowhere more so than in the power grid. The region lags behind West and East Africa in terms of access to electricity. Only 24 percent of its residents have access to electricity, and in rural areas the proportion is closer to five percent.

Malawi, Angola and Tanzania have yet to be connected to a common power pool, the Southern African Power Pool, set up by national electricity companies in 1995 to create a common market for power in the region. Bringing them in forms part of SADC’s short-term infrastructure development goals.

Southern Africa is better placed than ever before to be able to finance its more ambitious dreams. Countries in the region have been remarkably resilient in the face of the global economic slow-down. According to the International Monetary Fund (IMF), the region registered robust growth of 5.1 percent in 2012, which could accelerate to 5.4 percent this year.

Demand for the region’s commodities is partially driving growth, according to the IMF.

But that is only part of the story. Southern Africa is more politically stable than it has been for decades, young people are increasingly taking advantage of new economic opportunities – particularly those presented by information technology – and prudent fiscal policies by governments have helped buffer countries from the crisis and helped build up foreign reserves

“These countries now have quite a lot of capacity to raise debt. The question is how much and how sustainable is it?” Graham Smith, programme manager for Trademark Southern Africa, a United Kingdom-funded programme to help boost regional integration, told IPS.

An obvious source of infrastructure funding is the African Development Bank. Infrastructure already makes up over 30 percent of its portfolio, but governments and the bank alone are not up to the task of raising the kind of finance that is now needed.

The bank is in the process of setting up the “Africa 50” fund that it hopes will be able to leverage some 100 billion dollars to finance infrastructure on the continent. The timing for the initiative is right, according to the bank. Quantitative easing in Europe and the United States will make infrastructure investments in the developing world more attractive.

“You are looking at mid-single to double-digit returns over a long period of time such as for roads or power projects,” the African Development Bank’s regional director Ebrima Faal told IPS.

Investment will not only come from outside, but from the continent itself, Faal believes.

“We see tremendous potential for pension funds. We also see tremendous potential for central bank reserves and other sovereign funds investment,” he said.

Beyond development financing, SADC is setting a great deal of store in building what it calls “public private partnerships”.

In Mozambique, the lack of rail infrastructure is hampering a coal rush in the northeastern Tete province. Brazilian coal company Vale had little choice but to finance the revamping of an old rail track through Malawi and down to a deep-water port on Mozambique’s coast, in order to get its coal out. The company said it would spend 6.5 billion dollars on railway and port construction.

“Sometimes people think it is easy. It is not easy. For each dollar we invest in our mine we have to invest another in infrastructure to enable the project to be feasible,” Vale’s chief executive officer in Mozambique, Ricardo Saad, said.

Thanks to Vale’s line, landlocked Malawi will be able to move its goods more easily to the coast as extra capacity is reserved for passengers and goods. And the line offers possibilities of linkages to Zimbabwe and Zambia.

The region’s rail network is a mishmash of poorly maintained, insular systems that need to be painstakingly revamped and connected to each other for development corridors to become realities.

And concessionaires are seldom prepared to take all the risks involved in building infrastructure unless they are involved in high-yield activities like coal mining.

“Ports and power projects are the most likely to attract public-private partnership because you can ring-fence a long-term revenue stream,” said Smith. Much of the rest, he added, “will be public-sector financed.”

China’s deepening role in the infrastructure sector was a matter not widely discussed in Maputo. The Asian giant already has a 20 percent market share of infrastructure contracting, according to a 2012 report by business consultants Ernst & Young. Chinese loans for infrastructure are growing and in 2011 close to 15 billion dollars in Chinese commitments were secured for infrastructure projects continent-wide.

“We are considering collaborating in transport and power projects. It is a big market from a business point of view,” Jon Lee from China’s Development Bank told IPS. The bank’s presence in Maputo was the only sign of a real and burgeoning Chinese engagement on the continent.

“We are going to engage China big time,” SADC’s director of infrastructure and services, Remmy Makumbe, told IPS. “Our only concern about China is that it is mostly involved in bilateral arrangements rather than regional arrangements. We don’t have a problem as long as they engage in bilateral projects that address a regional framework.”

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