Another great infographic from the folks at Visual Capitalist. For the full diagram please click their webpage at this link.
The following abridged article was authored by Suren Naidoo, published in MoneyWeb on 6 June 2019.
Ports and logistics parastatal Transnet is moving ahead with plans to develop a new ‘inland port’ [terminal] in Gauteng and on Wednesday announced the winning bidder that will develop and operate the R2.5 billion Tambo Springs Intermodal Terminal in Ekurhuleni.
Transnet’s says the deal represents a major public-private partnership (PPP) that will see Southern Palace Joint Venture Consortium holding a 20-year concession for the new inland terminal, which will complement the container facilities at City Deep.
A wholly black-owned and managed diversified industrial holding company, Southern Palace is the lead concessionaire in the consortium. Its partners in the project include Italian state rail and infrastructure company Ferrovie dello Stato Italiane as technical partner and supply chain and advisory group Makoya as logistics and marketing partner.
The new terminal in Springs will have an initial capacity to handle around 225 000 TEU [20-foot-equivalent unit] containers in its first phase and ultimately grow to handle some 550 000 TEUs. City Deep, located near the Johannesburg CBD, has a capacity of 400 000 TEUs and has already reached almost 80%.
The new Springs terminal will boost efficiencies as a fully-fledged modern intermodal facility, directly connected to the Natal Corridor (Natcor) rail link between Durban and Johannesburg.
The PPP project will improve the rail freight system in the country and boost economic growth. Transnet has experienced challenges on the general freight rail side, which has been in systemic decline over the years.
The decline of general freight rail has contributed to the growth in the number of trucks on national roads, especially the N3 between Durban and Johannesburg. There is therefore some urgency to get general freight working again on rail. With time-sensitive cargo, rail can play a critical role as part of the intermodal mix.
The Springs terminal is expected to break ground by November and is anticipated to open in 2022.
It will be located on a 67-hectare (ha) site within the broader Tambo Springs Logistics Gateway development, which is being master-planned by the Tambo Springs Development Company on 607ha of land near the N3. Transnet has already purchased 35ha of land within the new development node, with another 32ha being negotiated.
The City of Ekurhuleni will provide major bulk services for the development. The terminal will be developed as part of a next-generation logistics gateway combining direct terminal handling facilities as well as back-of-terminal property development and related value-add logistics services and activities.
The existing Natcor dual directional freight rail line runs directly to the site of the [new terminal]. Transnet will therefore not incur significant additional costs for new rail infrastructure to connect to the new terminal, but rather, leverage off the existing infrastructure.
Once the terminal is developed, it is expected to spur surrounding industrial and commercial property development to the tune of around R20 billion from the private sector.
Southern Palace, told Moneyweb that Southern Palace has brought in international rail and container terminal specialist Italferr, which is part of the Ferrovie dello Stato Italiane group. The joint-venture consortium is also supported by Concor and engineering firm AECOM.
Southern Palace has raised around R7 billion to date through its various businesses, so the terminal will be largely “self-funded”.
See the unabridged article here!
On 9 November 2017, the Secretary General of the World Customs Organization (WCO), Kunio Mikuriya, announced today that 2018 will be dedicated to strengthening the security of the business environment, with the slogan “A secure business environment for economic development.”
The development of international trade is not an end in itself, but rather a vehicle through which economic development can be achieved. We should, therefore, strive to create an environment for businesses that will foster their participation in trade, for the benefit of all.
With the above in mind, it is imperative that we ask ourselves, how we can, as Customs, contribute to better secure the business environment and, in doing so, boost economic prosperity. Three key elements come to the forefront:
It is globally recognised that Customs can contribute to making the business environment more stable and predictable by, for example, streamlining procedures, tackling corruption, enhancing integrity, and facilitating the movement of goods, conveyances and people in general.
Legitimate businesses require a secure supply chain to prosper, but some threats come from within the trade itself, such as the shipment of illicit goods that could endanger peoples’ health, safety and security. Combating cross-border crime, including the illicit funding of international terrorism through trade activities, is our responsibility. By taking advantage of the WCO’s tools, instruments and expertise, Customs has the means to actively secure the global trade landscape.
Fair and sustainable environment
The importation of illegal goods, such as goods that infringe intellectual property rights (IPR), or legal goods which, for example, are smuggled into a country to avoid the payment of duty or whose value has been misreported, can do immense harm to a country’s economy. It is not only a question of financial losses for both legitimate traders and governments, such activities can also affect governance, the economy, development and human security across the globe.
“All these different aspects of securing the business environment are invariably connected to the current Customs focus on trade facilitation, in particular the implementation of the WCO Revised Kyoto Convention and the World Trade Organization’s Trade Facilitation Agreement that support the goals contained in the United Nations’ Transforming our world: the 2030 Agenda for Sustainable Development,” said Secretary General Mikuriya.
The WCO’s annual theme will be launched on International Customs Day, which is celebrated annually by the global Customs community on 26 January in honour of the inaugural session of the Customs Co-operation Council (CCC) which took place on 26 January 1953. The WCO invites the Customs community to mark 26 January 2018 in their diary.
Global trade has reached its peak and globalisation is giving way to localisation, which is one of the most “profound changes” currently facing the global economy, says Paul Donovan, global chief economist at UBS Wealth.
Accounting for about a quarter of the world’s GDP, global trade is at a record high. “This is as good as it gets. What we are now starting to see is localisation returning to the manufacturing sector,” Donovan said on Tuesday, speaking at a Sasfin Wealth event.
Advances in robotics and artificial intelligence, collectively referred to as the fourth industrial revolution, mean that factories are mechanising, and are placed closer to companies’ consumer markets.
Swedish retailer H&M is using robotics, manufacturing most of its clothing in Europe, not Asia, enabling it to respond to consumer demand more effectively, Donovan said.
This allows the fast-fashion front-runner to quickly respond to consumer demand and even unseasonal weather.
“The fourth industrial revolution will dramatically alter investment, economics and society.”
At SA’s recent inaugural Singularity University event, disruption innovation expert David Roberts said that 40% of the S&P 500 companies would disappear in the next 10 years as exponential technologies disrupted a host of industries. The average lifespan of an S&P 500 company had decreased from 67 years to 15 years, he said.
While only about 9% of jobs would disappear altogether, automation and digitisation would affect about 40% of jobs, said Donovan. This would require people and companies to adapt to new ways of doing things.
“If your university degree is reliant on memorising a textbook, you are a low-skilled worker. We need companies and countries with workforces that are flexible.”
Donovan predicted a return to the imperial model of trade, where raw materials and intellectual property were imported, while “everything else” happened close to the consumer. “Raw materials will still be globalised, but finished products will be declining as a force for global trade in the years ahead.”
Source: Originally published in Business Day, Ziady. H, September 6, 2017. Globalisation gives way to localisation, in profound change, UBS economist says.
“Is the Africa Growth and Opportunity Act (AGOA) always a poisoned chalice from the United States of America?”, asks an editorial in The East African. The Kenya newspaper suggests it appeared to be so after the US allowed a petition that could see Tanzania, Uganda and Rwanda lose their unlimited opening to its market.
This follows the US Trade Representative assenting last week to an appeal by Secondary Materials and Recycled Textiles Association, a used clothes lobby, for a review of the three countries’ duty-free, quota-free access to the country for their resolve to ban importation of used clothes, the The East African continues.
The US just happens to be the biggest source of used clothes sold in the world. Some of the clothes are recycled in countries like Canada and Thailand before being shipped to markets mostly in the developing world.
In East Africa, up to $125 million is spent on used clothes annually, a fifth of them imported directly from the US and the bulk from trans-shippers including Canada, India, the UAE, Pakistan, Honduras and Mexico.
The East Africa imports account for 22 percent of used clothes sold in Africa. Suspending the three countries from the 2000 trade affirmation would leave them short of $230 million in foreign exchange that they earn from exports to the US.
That would worsen the trade balance, which is already $80 million in favour of the US. In trade disputes, numbers do not tell the whole story. Agoa now appears to have been caught up in the nationalism sweeping across the developed world and Trumponomics.
US lobbies have been pushing for tough conditions to be imposed since it was enacted, including the third country rule of origin which would require that apparel exports be made from local fabric.
The rule, targeted at curbing China’s indirect benefits from Agoa through fabric sales, comes up for a legislative review in 2025, making it prudent for African countries to prepare for the worst. Whether that comes through a ban or phasing out of secondhand clothing (the wording that saved Kenya from being listed for a review) is immaterial.
What is imperative is that African countries have to be resolute in promoting domestic industries. In textiles and leather, for instance, that effort should include on-farm incentives for increasing cotton, hides and skins output, concessions for investments in value-adding plants like ginneries and tanneries and market outlets for local textile and shoe companies.
The world over, domestic markets provide the initial motivation for production before investors venture farther afield. Import bans come in handy when faced with such low costs of production in other countries that heavy taxation still leaves those products cheaper than those of competitors in the receiving countries.
The US has also been opposed to heavy taxation of used clothes, which buyers say are of better quality and more durable. For Kenya to be kept out of the review, it had to agree to reduce taxes on used apparel.
These factors have left Agoa beneficiaries in a no-win situation: Damned if you ban, damned if you do not. With their backs to the wall, beneficiaries like Tanzania, Uganda and Rwanda have to think long term in choosing their industrial policies and calling the US bluff.
Beneficiaries must speak with one voice to effectively guard against trade conditions that over time hamper domestic industrial growth. Source: The East African, Picture: US GAO
The introduction in the coming months of a new customs tariff in Angola is feeding expectations among economic agents that replacing the current regime will be a stimulus to the country’s growth.
A new customs tariff system, submitted to the Council of Ministers and expected to be implemented this year, proposes cuts on import duties on foodstuffs such as fruit and vegetables, cooking oils and grains (including wheat flour), as well as raw materials such as iron, steel and aluminium products as well as second-hand cars, the Angolan press reported.
The aim is to replace the existing customs tariff system – introduced in 2014 before the start of the economic and financial crisis now facing the country – which is generally regarded as protectionist of local farmers and manufacturers, seeking to make imports more expensive in order to encourage diversification of an economy that is highly dependent on oil.
The current tariff has been the subject of much criticism from local and international companies as well as from the World Trade Organization (WTO).
In its most recent report on Angola, the Economist Intelligence Unit (EIU) said replacing the current tariff would likely be a positive move, as it had the effect of increasing the cost of domestic production and reducing competition in the market.
Despite tariff protection, the EIU points out that operational challenges – such as a lack of electricity, poor supply chain management and lack of human resources – have kept the country dependent on imports.
In addition to this, the fall in the price of oil following the introduction of the 2014 tariff has limited access to foreign currency for Angolan companies, making payments to suppliers abroad difficult and, as the kwanza has weakened, imports have become significantly more expensive.
“If and when (the new tariff is) applied, the cost of imports should fall and this should help fight inflation. A less protectionist customs regime should also stimulate Angola’s trade with its neighbours and can help the country finally meet the long-standing promise of joining the Southern African Development Community’s free trade zone,” the EIU said.
“A review of Angola’s current punitive customs regime should give a positive boost to the national economy. However, it is still unclear when the new tariffs will be applied,” it said.
In 2016, Angola formalised its accession to the International Convention for the Simplification and Harmonization of Customs Procedures (Kyoto Convention) of the World Customs Organisation, which aims to facilitate international trade.
Each acceding country has a deadline of 36 months to apply the general rules of this agreement, which provides for the minimisation of customs controls between members, thus facilitating and simplifying international trade. Source: macauhub
The World Customs Organization (WCO) organized a National Workshop on Inland Depots under the sponsorship of the Customs Cooperation Fund (CCF)/Japan and the Japan International Cooperation Agency (JICA). It was held from 20 to 22 September 2016 in Savannakhet Province, Lao People’s Democratic Republic.
Twenty six Customs officers from the Lao Customs Administration participated in the workshop, along with guest Customs experts from The Former Yugoslav Republic of Macedonia, Japan and JICA. Mr. Somphit Sengmanivong, Deputy Director General of the Lao Customs Administration, opened the workshop. He highlighted the importance of Inland Depots as a national strategy to secure his country’s economic growth and sought participants’ active participation in the discussions on this topic.
Presently, there is no clear definition of “Inland Depot” and many similar terms, such as Dry Port, Inland Terminal, Free Trade Zone and Special Economic Zones, are used in the international logistics. During the three-day workshop, participants discussed the functions and a possible definition of Inland Depot from a Customs perspective.
Comment – Inland container terminals serve as important hubs or nodes for the distribution and consolidation of imported and export destined cargoes. There are 16 Landlocked countries in Africa, which signifies the importance of hinterland logistics development and its consequential impact on regional trade groupings. Consequentially, it behooves governments to understand and support the logistics supply chain industry in maximizing inland transportation (multi-modal) infrastructures to achieve a common and mutually beneficial economic environment. Furthermore, the more facilitative these arrangements, the better opportunity there is for success and longer-term economic sustainability.
The WCO Secretariat made presentations on international standards for relevant procedures, including Customs warehouses, free zones, Customs transit, inward processing, clearance for home use and temporary admission. Experts from The Former Yugoslav Republic of Macedonia and Japan described their national and regional experience of Customs warehousing, and Customs transit procedures. The JICA expert presented the bonded procedures applied by neighbouring countries to Lao People’s Democratic Republic. Lao Customs administration explained their national system for Inland Depots and a logistics company of Lao PDR shared its expectations on inland depots.
On the last day, participants discussed the challenges and possible solutions to enhance the functional and efficiency of Lao’s Inland Depots. Possible solutions, such as the use of modern information technology, further cooperation with the private sector, clear regulations on relevant procedures, coordinated border management and international cooperation were considered. Source: WCO
- The 2003 Almaty Programme of Action (UNCTAD)
- Transit – Addressing the plight of Landlocked Countries (mpoverello.com)
- A critical view in support of East African Land Locked Countries – Lessons for the South? (mpoverello.com)
- Important Implications of the WTO TFA on Landlocked Countries (mpoverello.com)
The Southern African Customs Union (SACU) is an almost invisible organisation. Yet it has arguably had a profound impact on South Africa’s economic and even political relations with its much smaller neighbours – and on those four small countries themselves. But there are also deep differences among its five members – the others are Botswana, Lesotho, Namibia and Swaziland (BLNS) – about what the essential nature of SACU should be.
This weekend, SACU ministers will be meeting in South Africa for a retreat to try once again to set a new strategic direction, a roadmap into the future, for this critical body.
The leaders of the member countries will meet in a summit, also in South Africa, sometime before 15 July – when South Africa’s term as SACU chairs ends – to adopt or reject this roadmap. The aim of the changes in the SACU treaty would be to turn it ‘from an arrangement of convenience held together by a redistributive revenue formula to a development integration instrument,’ South African Trade and Industry Minister Rob Davies said during a press briefing in Kasane, Botswana, last Friday.
Davies said there were still ‘lots of differences’ among SACU members, which they had been unable to resolve despite years of negotiations.
SACU was founded in 1910 – the year South Africa was also created. Since then, the common external tariff it created has functioned as an instrument for the much larger South Africa to support the much smaller BLNS economically, by re-distributing to them a disproportionate share the customs tariffs collected at the external borders. Or, depending on your point of view, to relegate them to being passive markets for South African products.
The new African National Congress government, which came to power in 1994, ‘democratised’ relations with the BLNS by creating a Council of Ministers to make decisions by consensus in a new post-apartheid SACU treaty, which came into force in 2004. But the basic deal remained the same, as Davies implicitly acknowledged in last Friday’s briefing when he said: ‘we have historically just set the tariffs on behalf of SACU … and … in return for that, provided compensation … in the revenue-sharing formula.’
Also read – SACU Retreat announced by President Zuma
The re-distributive revenue-sharing formula has been hugely important for the government revenues of the BLNS. In South Africa’s 2015-2016 budget year, for example, the total revenue pool was expected to be about R84 billion, of which the BLNS would receive R46 billion – according to Xolelwa Mlumbi-Peter, Acting Deputy Director-General in South Africa’s Department of Trade and Industry, in a briefing to the parliamentary portfolio committee on trade and industry last year. She added that South Africa contributes about 98% of the total pool, while BLNS receive about 55% of the proceeds.
That meant South Africa was losing – or re-distributing – about R44.3 billion in that budget year, as de facto ‘direct budgetary support’ to the BLNS, to use the language of Western development aid.
‘This is seen as “compensation” for BLNS’s lack of policy discretion to determine tariffs, and for the price-raising effects of being subjected to tariffs that primarily protect SA industry,’ Mlumbi-Peter said.
A glaring example of that dynamic is South Africa’s maintenance of import tariffs on foreign automobiles to protect its own automobile industry. That, of course, makes automobiles more expensive in the BLNS countries.
And should South Africa choose instead to grant rebates on some tariffs – for example to encourage imports of inputs into South African industrial production – this would also impact negatively on the BLNS by reducing their tariff revenues, Mlumbi-Peter suggested.
In 2011, South African President Jacob Zuma chaired a SACU summit to review these inherent disparities. It agreed on a five-point plan to change SACU’s fundamentals, including a review of the revenue-sharing formula; prioritising work on regional cross-border industrial development, including creating value chains and regional infrastructure; promoting trade facilitation measures at borders; developing SACU institutions; and strengthening cooperation in external trade negotiations.
Nonetheless, as Davies said in Kasane, ‘we haven’t really been able to reach an understanding of what does development integration in SACU mean.’ And so Zuma had just completed a tour of visits to his counterparts in the BLNS countries to discuss these plans, and the upcoming retreat and summit. Davies said Zuma had found the BLNS leaders ‘flexible’ – though regional officials suggest otherwise.
Does South Africa, as the only really industrialised nation in SACU, not have inherent and irreconcilable differences with the rest of the body? Davies acknowledges that South Africa – with about 85% of the combined population, and about 90% of the combined GDP – also has most of the industries that demand tariff protection.
Nevertheless, he added, ‘We are all committed on paper to seeing tariffs as tools of industrial development… But there is also an obvious temptation for a number of other countries to see the revenue implications as more important.’ And, he did not add, there is also a growing feeling in South Africa that it could do with that R44 billion a year or thereabouts, which it gives to the BLNS every year.
The coincidence of the signing, on 10 June, of the Economic Partnership Agreement (EPA) between the European Union (EU) and the Southern African Development Community (SADC), and the attempt to revive SACU, underscored an ironic analogy of South Africa’s and the EU’s predicaments.
With the EPA, the EU hopes to shift its relations with the SADC nations away from the traditional donor-recipient type of arrangement, to one of more equal and normal trade and industrial partners. That, essentially, is what South Africa is also hoping to achieve with its proposed reforms of SACU.
But it’s hard to see how South Africa is going to convince the BLNS to give up R44 billion a year of hard cash in hand, in exchange for the rather dubious future benefits of being absorbed into South Africa’s industrial development chains.
Source: Peter Fabricius – ISS Consultant.
The EU has signed an Economic Partnership Agreement (EPA) on 10 June 2016 with the SADC EPA Group comprising Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland. Angola has an option to join the agreement in future.
The other six members of the Southern African Development Community region – the Democratic Republic of the Congo, Madagascar, Malawi, Mauritius, Zambia and Zimbabwe – are negotiating Economic Partnership Agreements with the EU as part of other regional groups, namely Central Africa or Eastern and Southern Africa.
For specific details on the key envisaged benefits of the agreement click here!
The EU-SADC EPA is the first EPA signed between the EU and an African region, with an East African agreement expected to follow in a few months, but with the West African agreement having met fresh resistance. EU Trade Commissioner Cecilia Malmström stressed at the signing ceremony the developmental bias in the agreement, which extended duty- and quota-free access to all SADC EPA members, except South Africa. Africa’s most developed economy has an existing reciprocal trade framework known as the Trade and Development Cooperation Agreement, which came into force in 2000.
South Africa, meanwhile, had secured improved access to the EU market on a range of agricultural products, as well as greater policy space to introduce export taxes. EU statistics show that bilateral trade between South Africa and the EU stood at €44.8-billion in 2015, with the balance tilted in favour of European exports to South Africa, which stood at €25.4-billion. This improved access had been facilitated in large part by South Africa’s concession on so-called geographical indications (GIs) – 252 European names used to identify agricultural products based on the region from which they originate and the specific process used in their production, such as Champagne and Feta cheese. In return, the EU has agreed to recognise over 100 South African GIs, including Rooibos and Honeybush teas, Karoo lamb and various wines.Sources: EU Commission and Engineering News
While commodity prices tanked and unemployment rose during South Africa’s worst ever drought over the last few months, wine making increased.
What’s more, South African wine exports were up a further five percent in 2015 and the industry is expecting even more growth in 2016 as South African wine continues to find new markets around the world.
While almost every farming industry is struggling in South Africa, the wine industry is going through “one of its most exciting phases in history” according to Roland Peens, director of wine retailer Winecellar.co.za.
The country is the seventh largest producer of wine in the world and for the 12 months preceding June 2015, wine production was at 959 million liters, with 423 million liters sold for export and 395 million liters sold domestically.
Not only is South Africa producing some fantastic wines, but the struggling rand is actually helping wineries as it offers a lucrative export market. The UK is by far the biggest receiver of South African wines with 109 million liters exported here. Germany is second with 79 million while Sweden, France, Netherlands and Denmark all take between 20 to 25 million litres of South African wine.
Canada (18 million litres), USA (11 million liters), Belgium and China (9 million litres each) and Japan and Switzerland (6 million litres each) make up the other big export markets.
The company has issued a request for proposals inviting suitably qualified global logistics service providers to design, build, operate, maintain and eventually hand over its proposed inland container terminal in Tambo Springs, East of Johannesburg – a 630ha site located on land originally known as Tamboekiesfontein farm.
The concession will be over a 20-year period and will be Transnet’s biggest private sector participation project to date.
The proposed terminal is in line with Transnet’s drive to migrate rail friendly cargo off the country’s road network.
The terminal is expected to be in operation by 2019 and will have an initial capacity of 144 000 TEUs per annum, with an option to ramp it up to 560 000 TEUs, depending on demand.
The project entails the following:
- Arrival and departure yard for handling cargo trains
- Terminal infrastructure;
- Terminal equipment;
- Stacking area;
- Warehousing space
- Distribution centre
- Inland Reefer facilities
Transnet Freight Rail will be responsible for the operation of the arrival and departure yard required to service the terminal.
The operator will be responsible for loading and offloading of containers and marketing of the facility. The winning bidder is expected to introduce new entrants – particularly black players – must have demonstrated technical expertise, a minimum of level 4 BBBEE status with a commitment to reach level 2 by the third year of operation.
Transnet currently operates 5 inland terminals in Gauteng, including the City Deep Container Terminal in Johannesburg, Africa’s largest inland port.
The proposed terminal is an integral part of the Presidential Infrastructure Co-ordinating Committee’s SIP 2, aimed at unlocking the country’s industrial development while boosting export capability. It is designed to complement Transnet’s container-handling capacity in the province.
This is the culmination of years of hard work and a demonstration of cooperative governance between Transnet, representing the national competence, and both the Gauteng Provincial Government and the Ekurhuleni Municipality.
The Tambo Springs terminal is one of three mega terminals that Transnet is planning to build in Gauteng over the next 20 years. It will be located in Ekurhuleni along the N3, just off the Natal Corridor.
The project is expected to create 50 000 jobs, and has stringent requirements for supplier development and skills transfer. Source: Transnet
The Namibian Ports Authority has completed the upgrade of all railway infrastructure at the Port of Walvis Bay at a cost of N$20M (US$1.3M)
The work was included in Namports maintenance programme in 2010, but is now part of wider plans to upgrade facilities at Walvis Bay in preparation for the completion of the new container terminal.
A total of 4.5kms of track inside the port and the section of railway running from the city into the port have been replaced using material that can cope with heavier loads.
A spokesperson for Namport said: “Although the project was of relatively low value, its execution was complex as we had to ensure minimum operational interruption to the track, which is in daily use.”
The new container terminal is being constructed on 40-ha of reclaimed land and will add 700,000 TEU of annual handling capacity to the existing 350,000 TEU. Walvis Bay is already attracting bigger ships and recently handled its biggest ever container vessel the CMA CGM DANUBE, a 112,580 dwt vessel with a nominal intake of 9200 TEU.
A statement from Namports read: “The visit of CMA CGM DANUBE complements our port expansion project, which accommodates greater carrying capacity. Following the completion of the port expansion project vessels such as this will be accommodated at the new container terminal.”
The Walvis Bay Corridor Group, which was set up to promote the use of the port among neighbouring states, is keen to improve ancillary infrastructure at Walvis Bay to make the most of the new terminal.
Namport manager for corporate communication Taná Pesat said: “The benefits are our safe and secure corridors to and from landlocked SADC markets. The frequency of direct ship calls and flexibility of doing business with ease.”
However, the plot of land at the port given to Zimbabwe in 2009 for the construction of a dedicated dry port has still not been developed. Source: World Cargo News
fDi Markets that even without the data for December, it is already clear that Kenya enjoyed a major increase in inward investment in 2015 when compared with 2014.
Greenfield investment monitor fDi Markets has tracked a bumper year for Kenya-destined FDI. Excluding retail, the monitor has recorded 78 projects between January and November 2015, a 36.84% increase compared with the whole of 2014. FDI entering Kenya during the 11 months of 2015 (for which data is available) has already surpassed that recorded for 2013, the previous multi-year high. fDi Markets is set to record 2015 as witnessing the highest number of inward FDI projects for Kenya since the it commenced tracking data in 2003.
fDi Markets has tracked the upward trend as beginning in 2007, with FDI levels increasing year on year between then and 2011. In the period between 2011 and 2014 a period of consolidation occurred in which inward investment fluctuated, with decreases recorded in 2012 and 2014. Between 2007 and 2015, fDi Markets has tracked a 766.66% increase in project numbers and a total capital investment of $14.04bn.
Kenya’s FDI resurgence in 2015 is further illustrated when compared with the rest of Africa. During 2015, Kenya attracted 12.58% of all FDI entering Africa, with only South Africa, a long-time powerhouse, attracting more, with 17.1%. This is further compounded by Nairobi attracting the most FDI on the continent at city level in 2015, beating Johannesburg, which has held this accolade since 2010.
With December’s data still to be recorded, Kenya is set to surpass previous years as a favoured destination for investment in Africa. With the implementation of proactive FDI legislation scheduled to be ratified during 2016 by Kenya’s government, further consolidation in 2016 is unlikely. Source: fDiMarkets
Around 2008, most Southern African countries began to realise that the great ambition found on the SADC website at that time of moving from a SADC free trade area to a customs union by 2012 was not going to happen.
The SADC website had a very EU-like regional integration agenda.
This is not surprising given that the great sugar daddy in Brussels basically funds the entire organisation. SADC wanted to replicate the EU linear model – first a free trade area where the countries trade freely among themselves; then a customs union where the members agree to a common tariff; and then a common market where all goods, services, capital and labour flow freely. Finally, SADC was to complete the copy of the EU by creating a monetary union.
This flattering imitation of the EU was obvious – the Brussels paymaster pays and we all happily follow their model into Kwame Nkrumah’s vision of a united Africa. But the ugly problem was, as ever, African history.
The less than subtle British also wanted a customs union in Africa. So, in 1910 they just created one – the Southern African Customs Union (SACU), which, like the proverbial bicycle without any pedals, still manages to stand because it is padded with money.
When the British implemented SACU after the Anglo-Boer War, there was no need for polite and time consuming subtleties of contemporary African consensus building. The Union of South Africa and the British high commissioner signed on behalf of the protectorates of Basutoland, Bechuanaland and Swaziland – not a black person in sight unless they were serving the tea.
Almost a century later those who designed the EU-like agenda for SADC’s integration conveniently forgot their history and somehow assumed that a customs union could be readily grafted on the SADC free trade area which was already in existence.
But there cannot be two external tariffs and, therefore, either SACU or SADC as a customs union had to go. And the difficulty that SADC faced with creating a customs union is that no one is ready to sacrifice national interests for a broader common good.
Free trade areas are relatively easy, they can be easily fudged, but customs unions are hard work because all the countries that are members have to agree to the external tariff.
In the meantime, the apartheid regime in Pretoria realised that it desperately needed to buy friends and influence enemies and so in 1969 it changed SACU from a regular customs union to one where the share of revenue from customs was derived from share of regional trade.
Normally, customs unions divide the revenue poll based on what economists call the ‘destination principle’. This meant that countries get the revenue depending on what imports were destined for that country. So if 5% of imports were destined for, say, Botswana, it would get 5% of the revenue.
But the SACU formula was purposely designed by South Africa to make the BLS (Botswana, Lesotho and Swaziland as members) completely dependent upon transfers from Pretoria by basing the formula on the share of intra-SACU trade and not external trade.
The oddity was that with the end of apartheid, things actually got even worse after the 2002 SACU re-negotiations because Pretoria agreed to a formula that made Botswana, Lesotho, Swaziland and newly independent Namibia get their share of customs revenue from SACU based on the share of intra-SACU imports.
SA imports almost nothing from SACU countries and the BLNS countries import almost everything from SA and so they get a huge amount of revenue. Many officials in Pretoria deeply resent the subsidies in SACU.
When the other SADC members saw how much money the BLNS countries were getting from Sacu, whenever the issue of a SADC customs union came up their response was – ‘me too please, we want the same formula!’
So, a SADC customs union would have eaten into the massive transfers (about N$20 billion per year) that Namibia and the rest of the BLNS states get each year from Pretoria and there was no way they were going to agree, and so the SADC customs union was not a realistic possibility.
After the obvious end of the SADC negotiations for a customs union, African negotiators began to look around for something that would keep them off the unemployment lines. The infamous African ‘spaghetti junction’ of the East African Community, Comesa and SADC with its overlapping membership became the next target. If you can’t form a customs union then just get a bigger FTA (free trade area).
Now this year, finally, an FTA has been signed but it has also been fudged. Few really want to give the highly competitive Egyptian producers free trade access to their African markets.
Ostensibly, we are moving to negotiate a continental free trade area which will finally begin the process of fulfilling of Nkrumah’s dream of a united Africa. But instead, what we have is Cecil John Rhodes’s dream of a market from Cape to Cairo – almost; no deepening of the African economic relationship into a customs union; just a widening to the north and west.
Free trade areas are a nice step forward but they normally require no real sacrifice of economic interests.
Europeans are guilty of many cruelties in Africa but none so absurd or spiteful as the ridiculous lines they drew on the map of the African continent in 1884 at the Berlin Conference when they divided up the continent. The Belgian barbarism in the Congo may fade from human memory and the wounds of apartheid may heal over time but African leaders will struggle to completely eliminate those economic and political lines from the map of Africa.
It is those lines and some petty “sovereign” economic interests that are the main reason why a billion dynamic people in Africa with such incredible natural resources continue to live in poverty. The Namibian (An opinion piece by Roman Grynberg, professor of economics at the University of Namibia.)
Rwanda is wooing investors to invest in the country through building special economic zones. The Rwanda Special Economic Zones (SEZs) is a programme within the Rwanda Development Board that is designed to address domestic private sector constraints such as availability of industrial and commercial land, availability and the cost of energy, limited transport linkages, and market access among others.
Francois Kanimba, Rwandan minister of trade and industry told Xinhua on Sunday that the country was ripe for investments especially in manufacturing, service industry, tourism and hospitality, skills development among others.
“We are planning to construct SEZs economic zones across the country where investors will have the opportunity to explore the untapped potentials in Rwanda,” he said.
Kanimba said that Rwanda’s business environment is secure and the cost of doing business is friendly and the World Bank’s doing business reports have for several occasions ranked Rwanda among fastest growing economies in world that have eased the cost of doing business.
The small East African nation has so far constructed Kigali Special Economic Zone (KSEZ) located in Gasabo District within the country’s capital Kigali with phase one and two occupying 98 and 178 hectares of land respectively.
The government is now planning for phase three, which is expected to occupy 134 hectares. Phases one and two of the zone cover a surface area of 277 hectares while the third phase will cover approximately 134 hectares.
The trade zone is well equipped with tarmac roads, water and electricity rollout in all designated plots and a waste water treatment plant.
Kanimba continued that the commercial zones are designed to provide investors with industrial and commercial land, improve availability of electricity and transport linkages.
Official data show last year Rwanda attracted 500 million U.S dollars worth of investments and the government is targeting to double the investments in 2015.
According to 2014 World Bank’s Doing Business ranking, Rwanda was ranked 46 out of 189 economies surveyed globally registering improvements in the ease of obtaining construction permits, getting electricity and getting credit. Source: http://www.xinhuanet.com