eeeeeTTTTTrrrrradequityadequityadequityadequityadequityA Newsletter of CUTS AfricaA Newsletter of CUTS AfricaA Newsletter of CUTS AfricaA Newsletter of CUTS AfricaA Newsletter of CUTS Africa

Year 15, No. 3/2016

Framework to Make Globalisation andTrade Work for Billions across Global South

– This cover story has been adapted from http://www.ip-watch.org/ & http://www.un.org/

CUTS AfricaEmail: lusaka@cuts.org (Lusaka)

Email: nairobi@cuts.org (Nairobi)Email: accra@cuts.org (Accra)

Website: www.cuts-international.org/ARC

I N T H I S I S S U E

Annual Zambian Inflation Dropped ... 2

KEPCO-ECG Sign Trade Pact .............. 3

Sustainable Trade Facilitation Regime .. 4

Ghana-Mali Collaboration .................. 5

Laws Not Enforced ............................. 6

Boosting Competition in African MarketsEnhancing Growth and EradicatingPoverty ............................................... 7

The 14th Session of United NationsConference on Trade and

Development (UNCTAD) opened onJuly17, 2016, with leaders calling fordeeper and broader cooperation betweentrade and development.

The Nairobi (Kenya) meeting is partof the UNCTAD’s tradition in whichthe agency holds a conference every fouryears to consider trade and developmentchallenges and agree on collectivesolutions.

The theme of the conference was:“From decisions to actions, movingtowards an inclusive and equitable globaleconomic environment for trade anddevelopment”, and more thanUS$14bn in deals were expected to beagreed by end of the meeting, accordingto UNCTAD Secretary GeneralMukhisa Kituyi.

The Kenya government said nearly7,000 delegates are convening at theKenyatta International ConventionCentre (KICC) from July 17-22, 2016.This is the same venue where the UNagency held its fourth conference fourdecades ago. Kenya’s independence fromBritain and the country’s historicleadership of the non-aligned movementthen, were the main reasons that led tothe choice of the East African city as thevenue.

The UNCTAD XIV follows thelandmark adoptions of the UN’s 2030Agenda for Sustainable DevelopmentGoals (SDGs), the Addis Ababa ActionAgenda and the Paris Agreement onclimate change. The SDG Agenda is ablueprint that will guide collectiveglobal action on development in thefollowing 15 years. Trade and relatedissues, such as innovation andIntellectual Property (IP) rights like

trademarks or patents are seen as part of theachievement of the SDGs.

Meanwhile, UNCTAD announced anew e-commerce initiative. “Developingcountries should grasp the rapidly growingopportunity of electronic commerce –e-commerce – worth around US$22.1tn in2015, up 38 percent from 2013, or riskfalling quickly behind”, it stated during theinitiative.

The new initiative, called ‘eTrade for All’,“brings international organisations, donorsand businesses under one umbrella, easingdeveloping country access to cutting-edgetechnical assistance and giving donors moreoptions for funding”, UNCTADmentioned.

At the end of the conference, thedelegates reached on an agreement on aframework that will guide the body’s workover the following four years, largely focussedon ensuring broad achievement of the newUN Sustainable Development Agenda.

Known as the ‘Nairobi consensus, theoutcome document culminated UNCTAD14, which opened on July 17, 2016 anddiscussed the theme ‘From Decisions toActions’, with the aim of contributing tothe efforts to achieve the goals of the 2030Agenda for Sustainable Development.

www.un.org

The conference saw concrete progressincluding the launch of a new e-tradeinitiative, the first UN statistical report onthe SDGs indicators, the launch of a multi-donor trust fund on trade and productivecapacity, and the commitment of morethan 90 countries for a roadmap on fisheriessubsidies.

The conference also saw a fashionshow, highlighting the creative andcommercial potential of Kenya’s fashionindustry, the launch of the current year’sEconomic Development in Africa Report,and highlighting issues around non-tariffmeasures, debt, and illicit financial flows.

Tradequity2 Year 15, No.3/2016

Economics and Development

US$116 Released for GhanaThe International Monetary Fund

(IMF) approved the release of aUS$116mn installment to Ghana after areview of economic and monetary reformsthat are part of an almost US$1bn bailoutplan for the West African nation. The totaldisbursements under the programmeamount to US$465mn.

Ghana turned to the IMF in April2015 after lower prices for its gold, cocoaand oil exports caused debt to balloon andits currency to decline against the dollar.Regular power cuts have also weighed onthe economy. Ghana President John

Dramani Mahamahas pledged that Ghanawould not seek further IMF bailouts.

(B&FT, 29.09.16)

CSR as Credit GuaranteesThe African Union (AU) and Action

Aid officials are rallying private companiesto finance public credit guarantee schemesusing part of their huge corporate socialresponsibility budgets. It is hopedproviding financial guarantees to lenderscould stimulate financing to agricultureas the continent seeks to increase foodproduction and stimulate growth.

The Organisation for EconomicCooperation and Development-Food andAgricultural Organisation (OECD-FAO)Agricultural Outlook 2016-2025 for Sub-Saharan Africa projects the region willcontinue importing foods over thefollowing decade as demand by thegrowing population outstrips production.

The outlook forecasts demand forfood to grow at more than 3 percent overthe coming decade, outpacing totalagricultural production projected to riseby only 2.6 percent a year. (TEA, 14.07.16)

E-GP Set for ExecutionThe Zambia Public Procurement

Authority (ZPPA)’s electronicgovernment procurement system (e-GP),which entails the use of information andcommunications technology (ICT) toprocure goods, works and services in thepublic sector, is set for implementation.

ZPPA Principal Public RelationsOfficer John Chipandwe said thatgovernment organisations, councils andparastatal companies are required toregister their organisations on the e-GPsystem to enable them to conductprocurement online, starting from 2016.

“ZPPA wishes to inform procuringentities that the introduction of the e-GPsystem automatically implies that thephysical certificate that was being issuedto suppliers will no longer be issued”.

(ZDM, 30.09.16)

Firms in Trade MalpracticesMultinationals are denying Africa two-

thirds of export revenue, according toshocking details in a new study unveiledrecently. The companies are exploitingcreative means to cheat Kenya and otherAfrican countries, the UNCTAD has

reported to partly explain the high povertylevels in the continent.

Under-invoicing of commoditiesproduced in Africa means most of theeventual selling price is accrued to thedeveloped countries at the expense of theplace of actual production. Through trademis-invoicing, countries are losing foreignexchange earnings, taxes and income thatmight otherwise be spent on development.

(TS, 21.07.16)

ICT Sector GrowsIn spite of a broader slowdown in the

economy, Ghana’s ICT sector has seenhigh double-digit growth over the past12 months, supported by newinfrastructure and value-added mobileservices. Growing penetration helped theICT sector outpace broader economicgrowth, according to data issued by theGhana Statistical Service in June. WhileGDP expanded by 4.9 percent year-on-year (y-o-y) in the first quarter of 2016,the ICT sector grew by some 18.8percent.

This represents a dramatic accelerationfrom the fourth quarter of 2015, whenthe sector expanded by 5.2 percent y-o-y,compared to 4.9 percent Gross DomesticProduct (GDP) growth. This significantincrease in the growth rate is all the moreimpressive in light of the challenges facingthe country’s economy, includingdownward pressure on the cedi, a fiscaldeficit and a drop in prices for some ofkey export commodities. (B&FT, 23.09.16)

Zambian Firm for Safer EnergyA Zambian energy firm that aims to

provide reliable and safer energy solutionsto rural communities has been establishedin the country with an initial investmentof 2mn. EPower Zambia, which is partof EPower Holdings of South Africa, isexpected to set up solar power inventorsthat will provide rechargeable batteriesand reduce the cost of buying candlesand ensure safety.

One solar power inventor will providebatteries to between 500 and 1,000households, thus supplementingGovernment efforts of providing ruralcommunities with reliable power supply.“E-power is an off-the-grid project comingto Zambia and will provide ruralcommunities with power.

(ZDM, 28.09.16)

Annual ZambianInflation Dropped

Zambia’s annual inflation rate hasmarginally dropped to 18.9

percent in September from 19.6percent recorded in August, due to areduction in prices for both food andnon-food items.

Central Statistical Office (CSO)Director John Kalumbi said that themonthly inflation rate for September,2016 was recorded at 0.1 percentcompared to 0.4 percent recorded inAugust 2016, indicating that on anaverage, prices increased by 0.1percent between August-September2016.

Kalumbi said that of the total 18.9percent annual inflation rate recordedin September 2016, food and non-alcoholic beverage productsaccounted for 12.0 percentagepoints, while non-food productsaccounted for 6.9 percentage points.

(ZDM, 30.09.16)

Tradequity Year 15, No. 3/2016 3

News on Trade

Hungary to Invest in GhanaHungary is exploring the renewal

energy, water management, InformationTechnology, waste management,agriculture and food processing sectors inGhana, in order to build stronginvestment projects in the country. Andras Szabo Hungary Ambassador toGhana, with additional responsibility overCote d’Ivoire, Guinea and The Gambia,mentioned this.

He said Ghana’s democraticcredentials, stability and economic growthmakes the desire of his country to investin these areas feasible. Szabo said themotivation is based on Ghanaians whohave studied in Hungary like LawrenceTetteh, an economist and renownedInternational Evangelist, with theorientation to build a win-win situationin the field of economics and traderelations. (GNA, 01.08.16)

Kenya Seeks to Amend RulesKenya is seeking to relax the rules on

importation of sugar to avert a loomingshortage fuelled by the underperformanceof local millers. Sugar is currently tradingat between Ksh100 (US$1) and Ksh125(US$1.25) per kg.

The Agriculture, Fisheries and FoodAuthority (AFFA) is evaluating theapplications of new importers and plansto increase the amount of sugar that eachcompany can bring into the country. Theimport quota is currently between 500and 1,000 tonne of brown (table) sugar,which is largely used for domesticconsumption; import permits remainactive for 45 days. Kenya can importbetween 12,000 and 15,000 tonne ofsugar every month from Common Marketfor Eastern and Southern Africa(COMESA) and East African Countries(EAC) member states. (TEA, 09.07.16)

CBTAOpens Information DesksCross Border Traders Association

(CBTA) has made headway towardsestablishing three trade information desks(TIDs) in respective border districts in aquest to formalise trade in the regions.

The TIDs in the three districts areLuangwa with neighbouringMozambique, Mpulungu and Nakondewith Tanzania. So far, two TIDs have beenestablished at Kasumbalesa and Mokamboborder posts with the DRC with funding

from COMESA. The Tanzaniangovernment has since urged its people toconduct trade formally by usingdesignated custom points.

(ZDM, 15.08.16)

Rise in Zambia-DRC TradeTrade at Zambia’s Kasumbalesa border

with Democratic Republic of Congo(DRC) is always at its peak with small-scale traders marketing their merchandisethrough the one-stop border entry point.

With the construction of theUS$25mn modern one-stop borderfacility, congestion has drastically reducedas a result of quick clearing of transporters.On the other hand, smuggling of goodsinto DRC, which was too rampant seemsto have reduced following theconstruction of a trade corridor on theDRC side. Using bush paths makes onepay more than using normal entry points.

With the establishment of TIDs at theborder, a good number of traders are nowopting to use designated customs entrypoints. (ZDM, 21.09.16)

Failing to Remit PromisesDeveloped nations failed to remit

Sh200tn they had promised developingcountries in the past decade. A new reportby the UNCTAD noted that the failure

had impacted heavily on thedevelopment agenda of vulnerablestates.

The report said developing countrieswould be better able to finance the SDGsif rich countries were meeting their 2002target to put 0.7 percent of gross nationalincome into overseas aid. Global goals,such as poverty eradication can only berealised if they are achieved everywhereand performance of LDCs will be criticalto achieve the SDGs. (TS, 19.07.16)

Violating Non-tariff MeasuresNon-tariff measures are wiping off a

tenth of exports from developingcountries. The UN has said developingcountries are losing about US$23bn(Sh2.3tn) every year to rich nationsthrough their failure to comply with non-tariff measures.

Data released by the UNCTADindicates the losses, which are equal toabout 10 percent of their exports, are lostto the Group of 20 (G20) through failureto comply with G20 non-tariff measures.

Non-tariff measures cover a broadrange of legitimate and important policyinstruments, including measures toprotect the health of a country’s citizensand its environment, too. (TS, 23.07.16)

KEPCO-ECG Sign Trade Pact

A memorandum of understanding (MoU) has been signed between the ElectricityCompany of Ghana (ECG) and the Korea Electric Power Corporation (KEPCO),

South Korea’s electricity company, to support the ECG’s operations. The partnershipbetween the two organisations would not only strengthen their cooperation but alsoenhance bilateral relationships between Ghana and Korea.

KEPCO is hopeful that their entry into Ghana would be a stepping stone forKEPCO to tap into the energy potential of the energy sector in West Africa. The ECGis looking forward to building strong partnership with KEPCO in various areas, such assystem distribution assets management, system loss reduction, among others, to developand enhance its operations. (DG, 30.09.16)

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Tradequity4 Year 15, No.3/2016

News on Trade

Talks on Value AdditionThe priority areas for Tokyo

International Conference AfricanDevelopment (TICAD) will bediscussions on value addition to goods totilt the skewed relationship betweenAfrica and Japan. Africa has borne thebrunt of the downturn in internationalcommodity prices since their majorexports are raw commodities. East Africaexports tea, coffee, macadamia nuts andother agricultural produce to Japan in rawform and in low volumes – which is notenough to shift the skewed relationshipbetween the countries.

The heads of state attending themeeting are expected to push forfavourable trade deals that will see themexport more to Japan. They are expectedto push for removal of restrictions,especially duty on African exports.

(TEA, 06.08.16)

Kenya Imports US$6.6mn MaizeKenya has imported more than

US$6.6mn’s worth of maize fromTanzania and Uganda in the past monthamid claims of contamination of its ownmaize in government stores, as a result ofwhich the retail price of a 2 kg packet hasrisen by US$0.15 in the past threemonths.

This development comes barely threemonths after Kenya and Uganda soldmore than 10,000 tonne to Tanzania to

help fight starvation in neighbouringMalawi. Data from the RegionalAgricultural Trade Intelligence Network(RATIN) shows that since June 2016,Kenya has imported 18,754 tonne ofmaize from neighbouring countries, with13,103 tonne coming from Tanzania.

(TEA, 02.07.16)

Trade Bloc Creation SlowedSharp differences over agricultural

safeguards and the rules of origin haveslowed efforts to create a super continentaltrading bloc lumping up 26 Africancountries.

A push by a number of countries toprotect their sugar, maize and riceproduction have delayed the formationof a bloc bringing together the EAC, theCOMESA and the South AfricanDevelopment Community (SADC).

Negotiators from the countries areasked for safeguards for “sensitive”agricultural segments and a strict rule oforigin that will keep cheap goods fromindustrialised countries out of the sharedmarket. (TEA, 11.08.16)

Loan to Boost Africa-Asia TradeThe African Export-Import Bank

(Afreximbank) has issued its first-everChina-Taiwan syndicated loan worthUS$300mn aimed boosting tradebetween Africa and Asia. According to astatement issued by Afreximbank

communications unit, the five-yearsyndicated loan that was guaranteed bythe Export-Import Bank of China (ChinaExim Bank) will help the bank increaseits support to trade in African countries,including Zambia.

Afrexim Bank has over the yearsprovided over US$1bn to the Zambiangovernment and the private sector. As partof the effort to strengthen trade tiesbetween Africa and China, Afreximbankand China Exim Bank recently signed aUS$1bn collaboration agreement topromote and finance the development ofindustrial parks across Africa.

(ZDM, 21.09.16)

Boosting China-Ghana TradeA Chinese delegation led by the

Chinese Ambassador to Ghana, SunBaohong called on the Director Generalof the Ghana Ports and HarboursAuthority (GPHA), Richard Anamoo, aspart of a working visit to deepen tradeand investment relations between the portauthority and the Chinese governmentparticularly in the area of sea trade.

Anamoo seized the opportunity tohighlight some of the investmentopportunities the port authority has tooffer. He revealed that the port authorityintends to develop an ultra-moderntraining institute for auxiliary portworkers, especially as the port areembarking on massive infrastructure andspace expansion. Richard Anamoo alsoexpressed the port authority’s interest toexplore this partnership. (B&FT, 23.09.16)

Zambia�s Trade DeficitZambia’s trade deficit for the month

of July 2016 went up by 33.3 percentowing to more imports than exports, saidCentral Statistical Office (CSO) Directorof census and statistics, John Kalumbi.

Kalumbi said Zambia’s trade deficitin July 2016 was K473.9mn fromK355.4mn recorded in June 2016,representing a 33.3 percent increase,meaning the country imported more inJuly 2016 than it exported in nominalterms. He said there had been a decreaseof 4.9 percent in the total value of metalexports from K4,171.0mn in June toK3,965.0mn in July 2016.

(ZDN, 06.09.16)

Sustainable Trade Facilitation Regime

Trade and Industry Minister, Ekwow Spio-Garbrah, has called for an effective andsustainable trade facilitation regime as it will drive the inflow of foreign direct

investments (FDIs) as well as enable governmentto rake in more trade taxes at the country’s entrypoints to cushion socio-economic development.

To this effect, he has challenged the variousMinistries, Departments and Agencies

(MDAs), which routinely issue licenses,permits and exemptions for imports andexports transactions in the portcommunity to work towards meetingissuance of such trade requirementswithin a maximum of 48 hours in linewith international best practices.

Spio-Garbrah has indicated thattrade facilitation and its reforms have

emerged as key factors for international trade efficiency and that could be replicated inthe country. (B&FT, 27.07.16)

Tradequity Year 15, No. 3/2016 5

Regional Round Up

TFTA to Raise TradeThe proposed Tripartite Free Trade

Area between the East AfricanCommunity, COMESA and SouthernAfrican Development Community couldpotentially eliminate intra-regional tradebottlenecks and boost exports amongmember states by at least 30 percent.According to the EAC Secretariat, tradebetween the EAC and the CommonMarket for East and Central Africa in 2014amounted to US$2.7bn while flowsbetween the EAC and SADC stood atUS$3bn.

The United Nations EconomicCommission for Africa (UNECA) projectsthat the gains could even be bigger if non-tariff barriers between the three Sub-Saharan Africa blocs are eliminated whenthe tripartite arrangement comes into force.The manufacturing industry will be thebiggest beneficiary. (TEA, 03.09.16)

Growth at Chirundu BorderChirundu One-Stop Border Post

(OSBP) commissioned on December 05,2009 is Africa’s first functioning OSBPand one of the busiest border crossings insouthern Africa. Every month on anaverage 10,000 vehicles pass throughZambia’s southern gateway at Chirundu,which is now proving key in realising thedream of the much-talked-about regionalintegration.

It used to take between 72 and 120hours to clear a truck at the border, but itnow takes about 12 to 24 hours to makethe crossing.

The OSBP was initiated as a pilot tradefacilitation project under the North SouthCorridor (NSC), which is a tripartiteinitiative spanning across SADC,COMESA and the EAC regions.

(ZDM, 11.09.16)

COMESA�s CIACrusialThe Zambian government said that

adoption of the revised COMESA –Common Investment Area (CIA)agreement will encourage member statesto create a more stable investmentenvironment for both local and foreigninvestors.

CIA is a legal instrument designed toincrease investment flows withinCOMESA. The initiative will enhanceCOMESA’s competitiveness as adestination not only for foreign directinvestment (FDI) but also for domesticinvestment.

It also aims to build a good investmentenvironment, promote cross-border tradeand protect investments. Once adoptedand signed by the member states, the CIAwill be a great milestone in reaching theultimate goal of COMESA in relation tofacilitating investment flows in theregion. (ZDM, 12.09.16)

Demand for WA CocoaIt has been predicted that the cocoa

processing in Ivory Coast should reboundin the upcoming 2016/17 season,buoyed by an expected larger and betterquality crop, but its long-term profitabilitymay depend on developing local demandfor chocolate products.

The West African nation lost itsmantle as the world’s top cocoa processorin 2015/16 (October/September) whenit fell behind the Netherlands due toquality problems with its crop linked tothe El Nino weather phenomenon.

The West African nation’s hopes torevamp its branding and promotion oflocal tastes by designing and developingcocoa products for African tastes by usinglocal recipes. Figures from theInternational Cocoa Organisation

Ghana-Mali Collaboration

The National Petroleum Authority (NPA), and its counterpartin Mali, the National Office of Oil Products (ONAP) are collaborating

to improve efficiency in the petroleum downstream in both countries. Thepartnership between the two entities will, amongst other things, increasethe exportation of petroleum, products from Ghana to Mali from the currentthree percent to about 30 percent. Both countries would also shareexperiences of mutual benefit in the petroleum downstream industry.

The ONAP has also declared its interest in strengthening its relationshipwith the NPA and has promised to send delegations from his office to be onattachment with the NPA. In return, the NPA will also send a team tofacilitate knowledge transfer between the two institutions. (DG, 30.09.16)

www.google.co.in

(ICCO) show Africa accounts for about74 percent of world cocoa production.

(B&FT, 29.09.16)

EAC-EU Trade DealTanzania’s concern early this month

over the impact of Brexit on the East AfricanCommunity has presently turned into anopportunity for leaders and tradenegotiation experts to demand a review ofthe Economic Partnership Agreementbetween the regional bloc and theEuropean Union that was due for signingin August 2016.

The experts want the aspect ofliberalisation in the EAC-EU EPArenegotiated, with open-ended timebecause the agreement currently containsa number of provisions that are prejudicialand bound to constrain EAC’s development.

They also want a review of thenomenclature for classification of countriessuch as Kenya – the only developingcountry in the EAC – whose exports toEU, unlike those from least developedcountries, will face a stringent entry regimeif the EPA is not signed. (TEA, 23.07.16)

EPA Trade Deal with EUKenya and Rwanda have signed the

Economic Partnership Agreement (EPA)with the European Union even as two ofits EAC partners believe the deal does notauger well for the region’s economies.

The move, which comes hardly fourmonths after the East African CommunityCouncil of Ministers agreed to have themember states sign the trade deal, is seen tolikely cajole other EAC countries beat theSeptember 30, 2016 deadline. Being asingle customs territory, however, the otherEAC members – Tanzania, Uganda,Burundi and South Sudan must also signthe pact to make it enforceable.

(TEA, 01.09.16)

Tradequity6 Year 15, No.3/2016

Environment/Consumer Issues

Vodafone Priortises ConsumersVodafone Ghana has unveiled an

ultra-modern retail shop at Suame, nearKumasi in the Ashanti Region, as part ofits commitment to deliver great experienceto customers. By this move, customersengaged in various trades, such as carmanufacturing and repairs, auto and spareparts dealership in Suame will have first-hand contact and attention fromVodafone for all their telecommunicationneeds.

Additionally, the company alsodonated 100 motorbikes to its dealers inKumasi in an effort to empower them intheir daily activities. Yolanda Cuba, ChiefExecutive of Vodafone, Ghana said: “It isno secret that putting the customer firstin this very competitive telecoms landscapeyields excellent results”. (B&FT, 22.09.16)

Stop IIIIIllegal Mining: GMWUThe Ghana Mine Workers Union

(GMWU) of the Trades Union Congress(TUC) has warned that if steps are nottaken to stop the activities of illegal miners,the union would withdraw its services tothe industry.

Prince William Ankrah bemoaned thedangers posed to miners by the illegalminers. He mentioned that the illegalminers pose a threat to the safety andsecurity of our community member andthus, he, together with other unionmembers would be compelled at any stage

to withdraw labour services to the industryif illegal miners continue with theiractivities in the communities. He observedthat the issue had reached an alarmingproportion, forcing Anglo Gold Ashantito take the government to theInternational Court of Arbitration.

(B&FT, 20.08.16)

Standards Services to SMEsThe Zambia Bureau of Standards

(ZABS) has pledged to provide supportto the ‘produce local, buy local and uselocal’ campaign by actively promoting theuse of standards by all Small to Medium-sized Enterprises (SMEs) in the country.

Bureau head of marketing and publicrelations, Hazel Zulu, said effective use ofstandards in business processes as well asproduct development processes couldhelp SMEs enhance the quality and safetyof their product.

The move to support SMEs cameafter President Edgar Chagwa Lungu inhis inaugural speech said for the countryto self-sustain the economy, Zambia mustfirst produce local, buy local and use localand then export. (ZDN, 20.09.16)

Move to Enhance TradeAs part of efforts to overcome

challenges in transporting goods across theWest African sub region a Dutch-basedcompany, Ujuizi Laboratories, incollaboration with Borderless Alliance and

partners, launched the Chains of HumanIntelligence towards Efficiency and Equityin Agro-Food Trade along the Trans-AfricaHighway (CHEETAH) Project’s pilotphase in Accra (Ghana). CHEETAH is adynamic new smart device application.

This application aims to tackle tradeobstacles, post-harvest losses and poor roadconditions by collecting real timeinformation, including non-tariff barriersand road conditions, such as potholes, as aperson moves along the trade corridorswithin the sub-region. CHEETAH isfunded by the Dutch Ministry of ForeignAffairs and developed by UjuiziLaboratories. (B&FT, 31.08.16)

Untapped FT ProspectsThere are many untapped

opportunities in the financial technologies(FTs) used to reach unbanked people, easefinancial transitions and drive cashlesseconomies in Africa. At the recent GlobalAfrica Investment Summit held in Kigali,the mobile money platform M-Pesa wasmentioned as a success story, but expertsobserved that there exist new technologiesthat can be used to boost digital financeand e-commerce on the continent.

According to World Bank statistics onfinancial inclusion, the number ofunbanked adults globally fell from 2.5billion in 2011 to 2 billion in 2014.Mobile technology has played a significantrole in the growth of financial inclusion,particularly in micro-lending.

(TEA, 10.09.16)

Buy from Valid SuppliersZambia Bureau of Standards (ZABS)

has urged traders to ensure that they buyproducts from licensed manufacturerswho possess valid permits to supply.ZABS head marketing and publicrelations Hazel Zulu said a supplycertificate will show evidence and giveassurance to the trader that the productsthey are buying for re-sale have beeninspected, tested and certified fit for useby the bureau.

Some of the products that fall undermandatory standards include: mealiemeal, cooking oil, biscuits and bottledwater. Zulu said that supplying productswhich fall under mandatory/compulsorystandards without a licence or a permit tosupply is a violation of the law.

(ZDM, 13.09.16)

Laws Not Enforced

The Kenyan banking sector is currently in a state of confusion after the CentralBank of Kenya failed to issue guidelines on how the new law on capping interest

rates, which came into forceon September 14, 2016should be applied. A sectionof commercial banks havefailed to re-price outstandingloans and loans giventhrough mobile phones andother third party platforms inthe absence of clear-cutregulations.

It is also not clear whetherforeign currency-denominated loans areaffected under the newinterest rate regime. The

Banking (Amendment) Act 2016 caps lending rates at not more than four percentagepoints above the Central Bank Rate and deposit rates must at least be 70 percent of theCentral Bank’s benchmark rate. (TEA, 18.09.16)

www.google.co.in

Tradequity Year 15, No. 3/2016 7

Special Feature

Boosting competition in consumermarkets and key input sectors can help

African countries grow faster and alleviatepoverty, according to a report launchedrecently by the World Bank Group andthe African Competition Forum (ACF).

The report, Breaking Down Barriers, findsthat reducing the prices of basic food staplesby just 10 percent, as a result of tacklingcartels and improving regulations that limitcompetition in food markets, could liftnearly half a million people in Kenya, SouthAfrica and Zambia alone out of povertyand save households in these countries overUS$700mn a year.

At the same time, fundamental marketreforms to increase competition in keysectors is critical for competitiveness andeconomic growth. For example, ifcountries like Ethiopia, Ghana, Zambiaand others were to reform their professionalservices markets, this could generate nearlyhalf a percentage point in Gross domesticproduct (GDP) growth from industrieswhich use these services intensively. For acountry like Zambia, which had 1.7percent GDP growth in 2015, this can besignificant. The report also suggests thatthe impact would be even larger iffundamental reforms were implementedin other services, such as electricity,telecommunications, and transport whichhave higher spillover potential acrosseconomies.

“Strengthened competition policy in Africanot only encourages sustainable economic

Boosting Competition in African Markets:Enhancing Growth and Eradicating Poverty

growth and competitiveness across thecontinent by creating firms andindustries that are more productive, itdirectly impacts poverty by encouragingfirms to deliver the best deals toconsumers – particularly the poor –protecting them from paying higherprices for essential goods and services”,said Anabel Gonzalez, Senior Directorof the World Bank Group’s Trade andCompetitiveness Global Practice.

Sub-Saharan and North Africancountries have relatively low levels ofcompetition. More than 70 percent ofAfrican countries rank in the bottomhalf of countries globally on theperceived intensity of local competitionand on the existence of fundamentalsfor market-based competition.

Lack of competition hurts consumerwelfare in the region – especially for thepoorest. In many African cities the pricesof staple foods including white rice,white sugar, frozen chicken, bread,butter, flour, milk, potatoes and eggs areat least 24 percent higher than in therest of the world, even after taking intoaccount demand and transport costs.

Input markets in Africa also face barriersto competition, according to the report,curbing Africa’s competitiveness. In thetelecommunications sector for instance,in the 27 African countries studiedin Breaking Down Barriers, more than50 percent of the mobile market is heldby a single firm. Research from Africa

Gains from openingcompetition in

fertiliser, cementand

telecommunicationsmarkets can be

substantial

– This Special Feature has been adapted from an article published in The World Bank on July 27, 2016

has shown that entry of an additionaltelecom operator leads to a 57 percentincrease in mobile subscriptions, which canhave knock-on effects on the economy’sproductivity.

“There have been a notable number ofcountries adopting competition laws inAfrica, and this bodes well for growth anddevelopment. However, while the benefitsof competition are already clearlyobservable in Africa, there is stillconsiderable effort required to ensureeffective implementation of competitionlaws and policies across the continent”,noted Tembinkosi Bonakele, Chairpersonof the African Competition Forum andCommissioner of the South AfricaCompetition Commission.

As well as showcasing the benefits ofcompetition in particular sectors, the reporthighlights Africa’s important progress bycreating more effective competitionauthorities and regulators, and outlines areasof focus to encourage vigorous competitionin key markets in the region.

The number of African countries or regionalblocs with competition laws has jumpedfrom 13 to 32 in the last 15 years.Competition authorities operate in 25 ofthose jurisdictions. However, the reportsuggests that there is room to prioritiseresources and use the powers and toolsavailable more effectively to continue raisingthe relevance of competition policy withinthe broader development agenda in Africa.

www.cdn.mg.co.zawww.answerafrica.co

SourcesB&FT: Business and Financial Times, DG: Daily Graphic, GNA: Ghana News Agency, TEA: The East African, TS: The Standard,ZDN: Zambia Daily Nation, ZDM: Zambia Daily Mail

Tradequity newsletter: Composed by CUTS International Lusaka, 6211, Bukavu Road, Thorn Park, Lusaka, Zambia, Ph: +260.211.294892,Fax: +260.211.294892, E-mail: lusaka@cuts.org, CUTS Nairobi, Yaya Court 2nd Floor, No.5, Ring Road Kilimani off Argwings Kodhek Road,PO Box 8188, 00200, Nairobi, Kenya, Ph: +254.20.3862149, 3862150, 20.2329112, Fax: +254.20.3862149, Email: nairobi@cuts.org,and CUTS Accra, 30, Ground Floor, Oroko Avenue, Near Central View Hotel & ATTC, Kokomlemle, Accra, Ghana, Ph: +233.30.224.5652,Email: accra@cuts.org. Published by CUTS International, Head Office: D-217, Bhaskar Marg, Bani Park, Jaipur 302016, India, Ph: 91.141.2282821,Fax: 91.141.2282485, E-mail: cuts@cuts.org, Web Site: www.cuts-international.org

The news/stories in this Newsletter are compressed from several newspapers. The sources given are to be used as areference for further information and do not indicate the literal transcript of a particular news/story.

Publications

Our Twitter Handle (@cutsafrica)

@cutsafrica September 28: India, Nigeria ink one MOU and four Letters of Intent http://bit.ly/2dz44no

@cutsafrica August 1: Ghana signs an interim Economic Partnership Agreement with the EU http://bit.ly/2atORlc

@cutsafrica July 29: Breaking Down Barriers:Unlocking Africa’s Potential through Vigorous Competition Policy http://bit.ly/2amWQUH

@cutsafrica July 20: Development of regional infrastructure key to addressing challenges arising from NTBs, says Bipul of CUTS

@cutsafrica July 19: Ghana’s Parliament Calls for Competition Law via http://bit.ly/29S6LO3

Research Reports

Zambia Public Procurement Toolkit

Public procurement refers to the purchase by governments and state-owned enterprises (SoEs) of goods,services and works.1 Public procurement is estimated to account for between 10 and 15 percent of

gross domestic product (GDP) and is one of the biggest areas of spending by a government. In Zambia, anestimated 10 percent of GDP is spent on public procurement. This document is designed to provide a basicchecklist covering the steps in a normal procurement cycle. It aims to simplify the requirements under thelaw, and build-in a pro-competitive framework for procurement officers to rely upon.

We have drawn from good practices of many countries in drafting this document. Please note that whilethe specifics of every procurement process will be different, this checklist seeks to give a broad guideline andreminder to facilitate the process. We understand that under the laws of Zambia, there are different modes under which a governmentagency may initiate procurement, namely, Open Bidding, Open Selection, Limited Bidding, Limited Selection, Simplified Bidding,and Direct Bidding. The conditions to adopt these modes and some of the steps in the procurement cycle differ. This checklist islimited to the procurement of goods under the Open Bidding process.

http://www.cuts-ccier.org/CREW/pdf/Zambia_Public_Procurement_Toolkit.pdf

Leveraging Regional Policy Successes to ImproveInterventions by the FRA and the Performance ofMaize Markets in Zambia

About 90 percent of white maize consumption is in Africa and Central America. It fetches premium prices in Southern Africa where it represents the main staple food. While grain marketing boards in

Africa have remained major players in maize markets, their effects have been shown to be negative on boththe development of agriculture markets and the participation of the private sector. Facing the classical ‘foodprice dilemma’, where governments want to raise the price of maize for producers and at the same time keepit low for consumers, governments have engaged in a host of interventions that have not been efficient and

effective in achieving intended welfare policy goals. In this report some good lessons have been selected from other African countriesthat can act as best practices for the Food Reserve Agency (FRA) in Zambia.

In 2002 however, the FRA increased its maize commodity purchases due to a drought related poor harvest that resulted in thecountry experiencing a deficit in supply. In 2005, the FRA Act was amended, and it was given the authority to get involved inmarketing activities by providing a market to smallholder farmers – allowing it to essentially assume the role of a grain marketingboard1 (Mason and Myers, 2011, and Govereh et al., 2008). Since then, the FRA has become the main market player in maizemarkets, purchasing about 83 percent of total maize marketed surplus between 2010 and 2012.

http://www.cuts-ccier.org/CREW/pdf/Report-Leveraging_Regional_Policy_Successes_to_Improve_Interventions_by_FRA_and_the_performance_of_maize_markets_in_Zambia_NC.pdf