5 Aug 2014

‘Great Power’ Germany can be good for Africa


by Adekeye Adebajo

IF FOOTBALL is the continuation of war by other means, then Germany’s recent World Cup triumph has restored the country to Great Power status.

The centenary of the start of the First World War this year recalls the conflict whose aftermath sought to resolve the "German question" by shrinking its territory and crippling it economically through the punitive Treaty of Versailles. The weakness of the Weimar Republic led to the rise of Adolf Hitler and the Second World War. The Bonn Republic after 1945 saw the partition of Germany, and western Europe’s overriding concern was to keep the Germans down, the Americans in, and the Russians out. West Germany pulled off a spectacular Wirtschaftswunder (economic miracle), and today’s reunified Berlin Republic represents Europe’s most powerful and prosperous country.

Germany’s unemployment rate of about 5.4% is less than half of the European Union (EU) average, it is the paymaster of the EU, and the largest creditor in the euro currency zone. The Franco-German axis, which traditionally drove the EU, has now been replaced by the dominance of Chancellor Angela Merkel. As Germany reviews its foreign policy, it remains an economic giant and political dwarf, constrained by a past history of aggressive conquest. Berlin has historically sought to act as a "civilian power" that relies on multilateral institutions and trade rather than military force, promoting democratic governance, peaceful conflict resolution and sustainable development. Its allies have criticised this approach as an abdication of global responsibility by the world’s fourth-largest economy, and Berlin must find a way to harness its Friedenspolitik (policy of peace) to an enhanced political and security role legitimised by multilateral organisations in which it plays a more active leadership role.

German exports of machine guns, tanks, and submarines expose the contradictions of this Friedenspolitik. Berlin is now the world’s third-largest conventional arms exporter after the US and Russia. Germany has deployed troops to the Balkans and Afghanistan for more than 15 years, though a strong pacifism still remains among its population. Today, 5,000 German soldiers serve in 13 missions globally.

Germany’s Africa policy has traditionally been conducted through the EU, and Berlin’s total bilateral trade with Africa reached €44.9bn last year. Africa is the world’s fastest-growing continent, with a market of 1-billion consumers. Berlin can reduce its dependence on gas imports from Russia by importing more from Algeria and Nigeria.

Germany’s own reunification required transferring ore than $1-trillion to the east. It should, therefore, urgently meet the United Nations (UN) target of contributing 0.7% of gross domestic product to aid. Berlin has increased its trade with Asia in the past decade, with Beijing now accounting for about 38% of total German exports to the region, and Merkel paying her seventh visit to China this month. Germany has supported Beijing’s leading trade role in Africa and should help to promote EU policies on the continent that are not mercantilistically seeking to exclude China.

In 2003 and 2006, France and Germany respectively led EU forces to support UN peacekeeping efforts in the Democratic Republic of the Congo. Germany has also provided military trainers to support the present French intervention in Mali. There appears to be a bargain in which Berlin backs a French EU leadership role in Africa in exchange for Paris supporting Germany’s leadership of EU policies in eastern Europe. But Germany must be more discerning in aligning itself too closely with the increasingly discredited French military role in Africa. The recent interventions in Mali, Cote d’Ivoire, and the Central African Republic have, in fact, revived fears of Gallic neocolonialism in Africa.

As the third-largest contributor to the UN, Germany must continue to push for reform of a 15-member Security Council that is increasingly losing its legitimacy. About 60% of the council’s deliberations focus on Africa, while 75% of the UN’s peacekeepers are deployed on the continent. Berlin realises that council reform can occur only with the support of the organisation’s 54 African members. In a council vote in 2011, Germany’s abstention from the Anglo-French-led intervention in Libya now looks visionary, as anarchy reigns in the country, having spread its deadly lava across the Sahel into Mali.

Finally, Germany has Europe’s oldest population, and its workforce will be reduced by 6.5-million in the next decade. It will thus be forced to turn to immigration to fill this gap, which could radically alter its demographics. This is already evident in die Mannschaft that won the football World Cup in Brazil with four players of Turkish, Polish, Tunisian and Ghanaian ancestry.

Adekeye Adebajo is the executive director of the Centre for Conflict Resolution (CCR) in Cape Town, South Africa

The views expressed here are those of the author and not of ECDPM

Photo Courtesy of the President of the European Council 

This article originally appeared in Business Day Live

14 Jul 2014

African Union, EU outline priorities for Post-2015 development agenda


By ICTSD

The African Union Commission and the European Union each released their respective priorities for the post-2015 development agendas in May 2014, shortly after the circulation of a “zero draft” that would serve as a potential launching point for negotiating a set of Sustainable Development Goals (SDGs).

The Sustainable Development Goals would replace the current Millennium Development Goals (MDGs) when they expire next year, and are part of a broader initiative aimed at establishing a “post-2015 development agenda.”

African position highlights consensus

The release of the Common African Position (CAP) came during a 3 June meeting of the African Union Commission, held in Addis Ababa, Ethiopia. The document is a direct result of the work undertaken by a High Level Committee (HLC) set up by the African Union a year ago, and is meant to encapsulate the continent’s key priorities as it participates in the post-2015 negotiations.

The HLC process involved several consultative and technical meetings, in which officials reviewed a list of priorities developed by institutions across the continent with the goal of reaching consensus on a proper post-MDG framework.

The resulting CAP “reflects the aspirations of the African people,” said Liberian President Ellen Johnson Sirleaf, who chaired the High Level Committee.

Carlos Lopes, who serves as the Economic Commission for Africa’s (ECA) Executive Secretary, similarly hailed the CAP as “a concrete step towards mainstream[ing] all the key issues at the global level but with an African perspective addressing all the Sustainable Development Goals.”

“We therefore commit ourselves to speak with one voice and to act in unity to ensure that Africa’s voice is heard and is fully integrated into the global development agenda,” the consensus document says.

Scaling up the transformative agenda

The document groups Africa’s development priorities into “six pillars.” These include structural economic transformation and inclusive growth; science, technology and innovation; people-centred development; environmental sustainability, natural resources and disaster management; peace and security; and finance and partnerships.

“The overarching goals of CAP are to eradicate poverty and ensure human development, which are anchored in the six pillars,” said Anthony Maruping, Commissioner of Economic Affairs of the African Union Commission, who presented the document.

African countries have pledged to strengthen their productive capacities in order to foster industrialisation. They also aim to promote the processing of primary commodities by developing value chains across sectors, together with beneficiation policies, especially in the extractive sectors of their economies. Beneficiation refers to the treatment of raw materials, such as mineral ore, to improve their properties for further processing.

The CAP also calls for the modernisation of the agricultural sector, together with the enhancement of agricultural productivity, in order to ensure food self-sufficiency. Furthermore, the document emphasises the role of services and infrastructure development in facilitating economic transformation.

The current Millennium Development Goals have come under criticism by some experts, who claim that these placed a disproportionate focus on the social sector and took too much of a quantitative – as opposed to qualitative – approach to development.

This new common position therefore centres on value addition and proper use of resources, rather than the socially-oriented planning of past development models, said Ibrahim Mayaki, head of the New Partnership for Africa’s Development (NEPAD), in comments reported by Sierra Express Media.
NEPAD serves as the development arm of the African Union.

In the next phase of its work, the HLC will begin negotiations with other regions of the world as well as the continent’s development partners to ensure Africa's vision is included in the post-2015 global development agenda.

EU bets on sustainable development to tackle poverty

Separate to the CAP launch, the European Commission issued its own proposal last week outlining its development aspirations for the new SDGs.

According to the Brussels document, eradicating poverty and achieving sustainable development are fundamentally interrelated. The communication features “poverty”, “inequality,” and “food security” as the first three priority areas in a total of 17, and indicates the Commission’s plan to cluster them based on interlinkages.

The communication also highlights the role of trade liberalisation for poverty eradication and sustainable development.

“We encourage our partners, notably developed and advanced developing economies, to provide Duty Free and Quota Free (DFQF) and market access for products originating from LDCs as well,” the document says.

The European Commission also refers to the value of universality, while acknowledging the need to take “into account different national contexts capacities and levels of development.” Such differentiated treatment, it said, requires a consideration of each country’s respective starting points and capacities, and the need to ensure achievability, ownership, and measurability.

Brussels also says that the post-2015 framework should ensure a “rights-based approach” to promote sustainable development by ensuring “justice, equality and equity, good governance, democracy and the rule of law, peaceful societies and freedom from violence.”

Finally, the communication stresses the EU’s commitment to a strengthened global partnership, highlighting the 28-nation bloc’s role as one of “the driving forces behind mobilising action internally and worldwide.”

The Commission document will next be discussed by the Council of Ministers and the European Parliament. The result of these discussions, EU officials say, will serve to guide the bloc’s position in the UN negotiations.

September 2015 target date

The creation of the SDGs is a central part of the framing of the post-2015 development agenda, which will be negotiated by UN member states until September 2015.

Some experts have suggested that the value of the sustainable development agenda lies in its ability to identify connections between many issues. However, in terms of practical implementation, this is proving easier in theory than in practice.

The Open Working Group tasked with formulating these new SDGs will be holding their next formal gathering from 16-20 June, in what is expected to be a key meeting in advancing this process. The working group is expected to publish its conclusions next month, ahead of the UN Secretary-General’s report later this year. (See Biores, 2 June 2014)

ICTSD reporting; “EC Adopts Communication on SDGs,” IISD, 2 June 2014; “As it plans its own future, Africa engages with the world,” SIERRA EXPRESS MEDIA, 2 June 2014; “Millennium Development Goals and post-2015 Development Agenda,” ECOSOC, 2014.


This article is published under Bridges Africa Volume 3 - Number 6

Published in print 5 June, posted online 1st July 2014

The views reflected here are those of ICTSD, and not necessarily those of ECDPM

Image courtesy of Rhys Williams, ECDPM

30 Jun 2014

Africa and the New European Parliament: How Much Change Can We Expect?


By Vera Songwe

The European Parliament met yesterday [3rd June] to discuss the implications of the European Union elections and begin selecting new leaders for the parliament. African countries, like the rest of the world, will be closely watching the repercussions of the latest EU “earthquake” (in the words of French President Francois Hollande) on their economies and citizens.  These election results are once again the consequence of the 2008 financial crisis, only now—six years later—the crisis’ impact has moved beyond the initial effects on the financial sector and global trade to the socio-economic and political fabric of societies across the globe.

On May 25, 2014, Europe experienced an unprecedented political pivot to the far right, as European Union countries elected their leaders for the next five years. Seven countries of the EU (what I will call the EU7) voted to send far-right parties to Brussels. In France, these parties received 25 percent of the national vote; Denmark, 23 percent; the U.K., 20 percent; Austria, 20 percent; Hungary, 15 percent; Finland, 13 percent; and Greece, 12 percent.[1]Thus, the far right collectively will hold over 30 percent of the seats in the new EU parliament.

Lack of growth in Europe has dimmed the enthusiasm of integration and openness that formed the hallmark of the EU. The economics of the EU have changed: It started with 15 countries at the end of 2003 and growth rates of 3.9 percent on average, to 28 countries and an average growth rate of -0.4 percent in 2012. Of the seven countries that voted to shift to the far right, growth has plummeted from 4.2 percent in 2000 to -1.2 percent in 2012. Unemployment rose from 7.3 percent in 2000 to 10.3 percent in 2012 in these countries over the same period. Worse still, many of these countries have gone through five years of no growth. As a consequence, a sense of economic despair is growing among the middle and lower classes.  This difficult economic situation will be the backdrop of the meetings on Tuesday.

As they convene, the new members of the European parliament will not only begin to address the challenges of governing Europe and growing its economy; they will also examine their relationship with Africa. A number of issues pertaining to the EU’s relationship with Africa—including trade, openness and the Economic Partnership Agreement, immigration, development assistance and peacekeeping—will be under scrutiny. African leaders and their populations are watching to see how these important issues are addressed.   

Trade and the Anti-Globalization Movement

Unlike the EU7, Africa is experiencing unprecedented growth: It is expected to grow at 5.5 percent in 2014. Trade with the rest of the world is fuelling this growth, and trade with the EU is an important component.  Exports from Africa to the whole of the EU have increased from $95 billion in 2000 to $209 billion in 2013. Even if the overall share has been decreasing, this trade remains significant.  The largest exporters to Africa from the EU in 2013 were France (18 percent of all EU exports), Germany (14 percent), Italy (13 percent) and Spain (11 percent). Spain (17 percent of all EU imports), Italy (16 percent), France (16 percent), the United Kingdom (13 percent) and Germany (12 percent) were the largest importers. Manufactured goods accounted for 70 percent of all EU exports to Africa in 2013, while energy made up 64 percent of imports. The major trading partners with the EU are South Africa, Nigeria, Algeria and Libya.

To deepen trade relations, Africa and Europe have been negotiating regional economic partnership agreements expected to increase access of African countries to European markets—the most advanced of these discussions being the Economic Partnership Agreement (EPA) with the members of the Economic Community of West African States (ECOWAS), the largest regional trading block in sub-Saharan Africa. Negotiations on these agreements are set to conclude this year.

The negotiation of EPAs thus focuses on narrow market access considerations. African countries keep their preferential access to the EU market, with some minor improvements in the rules of origin, in return for opening up their markets to the EU over a defined transitional period. The EPAs, like many trade agreements under discussion, have become increasingly controversial for African countries, especially in the larger countries with industrial policies that seek to develop domestic industry by protecting local firms using trade barriers as a tool. To date no African countries have signed a full EPA, and only 14 of 45 countries have agreed to an interim one.

The questions for policymakers and those involved in the discussions are: What impact will the new parliament have on the direction of the negotiations and will the parameters of the negotiations change to reflect the new political leanings in Brussels? How will African countries react to this new landscape?  

Nationalism and Immigration

Nationalism is on the rise in all of the EU7 countries. For example, 17 percent of the French electorate reported that immigration is the most important issue facing France and Europe, ahead of their concerns for jobs, growth and macro-economic stability. The tension here is that, despite the rapid growth witnessed in Africa, migration from Africa to Europe continues to increase. In 2010, the stock of African migrants in France, the U.K. and Denmark—the top three right-wing countries of the new EU parliament—was 2.8 million, 1.2 million and 38,000, respectively. A significant share of migrants to France is from Algeria, Morocco and Tunisia, countries where economic growth has stalled due to, among other things, prolonged political crisis.  However, the migrants to the U.K. from Africa originate from Nigeria, Ghana and South Africa, where growth—driven mainly by the natural resource sectors—has on average been high but not inclusive.

The new EU parliament may embrace the idea of the French far right Front National party to reduce the number of migrants admitted into Europe by over 80 percent. The policy of deportation may also be accelerated.  This would have important implications for Africa. In an environment of high unemployment in Africa, a repatriation policy for even 1 percent of the nearly 3 million migrants in France today will only fuel social unrest on both sides with unwanted social and political consequences. Will the EU7 be ready for this?

In addition, many African countries are taking on the issue of immigration as a human rights issue and demanding better treatment of their citizens in Europe. More countries are increasingly demanding that European countries sign conventions on the treatment of migrants. If providing better living conditions for African migrants is seen as costly by European countries, it could provide a justification for tighter policies towards migrants and encourage repatriations. How will African countries react to this new environment?

South-South Collaboration

In the meantime, might the EU vote for an African pivot towards emerging market countries like China, India, Turkey and Brazil? During the crisis, Africa benefitted from increased trade with emerging market countries like China and India to maintain its high growth levels. Greater trade openness with emerging market economies helped African countries diversify their trade relations. While slow growth in Europe has led to a drop in exports from Africa to the EU, exports to China have increased. In addition, bilateral relations with China have gone from strength to strength, and, despite some setbacks, African countries are keen to take advantage of the increased resources from China. Could the recent EU also serve to deepen South-South collaboration? What further impact will the EU vote have on increased South-South trade?

Development Assistance and Peacekeeping

Development assistance from Europe remains high even as official aid allocations from the EU to Africa have fallen since 2011. Despite them economic crisis, many countries tried to protect development assistance, but now these efforts may be under threat. In 2012, only the U.K., Denmark, Luxembourg, the Netherlands, Norway and Sweden met the United Nation’s pledge to provide more than 0.7 percent of their GNI in development assistance. Today, the U.K. is the second-largest donor to Africa after the United States, France is the fourth largest, and Denmark is the eleventh. While FDI has grown significantly, development assistance remains an important source of resources for many countries, especially the fragile and conflict-affected countries with no access to other sources of funds.

In addition to development assistance, Africa relies heavily on the EU for peacekeeping. Currently there are over four EU peacekeeping missions on the continent in the Central African Republic (CAR), Mali, South Sudan and the Democratic Republic of Congo. In Libya and Egypt, some support is also being provided. In addition, the French took the lead in organizing the international community to restore stability during the recent crises in the CAR, Mali and Libya. With a new EU parliament likely to focus on internal issues, there are now legitimate concerns among African leaders that this assistance could decrease.
African leaders will have to wait to see what the new members of the European Parliament hold for the future of collaboration with Africa. In the meantime, a number of lessons from regional integration in Europe are evident and could help to bolster efforts at regional integration throughout Africa.

[1] The other big surprise of the election came from Italy—where the new Prime Minister Matteo Renzi’s Democratic party won a historic 40 percent of the vote. The largest country in the union, Germany, had no big surprises as the main conservative parties, the Christian Democratic Union (CDU) and the Christian Social Union (CSU), together won 35 percent of the vote.

Vera Songwe is a nonresident senior fellow with the Africa Growth Initiative and lead economist at the World Bank. Most recently, she was the adviser to managing director Dr. Ngozi Okonjo-Iweala, who oversaw the World Bank Operations in the Africa, Europe and Central Asia and South Asia regions, as well as human resources.

The views expressed here are those of the author and may not represent those of ECDPM

Photo courtesy of The Council of the European Union

This article originally appeared on Brookings 'Africa in Focus' blog

16 Jun 2014

EU-Africa: trading poverty away?


Political summits are known for sweeping declarations that are, more often than not, forgotten as soon as the ink is dry. The April 2014 EU-Africa summit, held in Brussels, appears to be no exception. Leaders from both sides unanimously proclaimed the need for a fundamental shift from aid to trade as agent of poverty reduction, but their actions did not stray far from the status quo, write Clara Weinhardt and Fabian Bohnenberger.

Yet the summit declaration deserves attention for bringing to the forefront some of the fundamental obstacles that block the long-proclaimed goal of poverty reduction through trade-based partnerships. Both sides mistakenly equate job creation and economic growth with the reduction of poverty. Moreover, neither side seems to have a clear understanding of what rights and obligations accompany such a shift to trade-based policies. Until both shortcomings are addressed, the tremendous potential of trade for poverty reduction cannot be realised.

The Missing Link

European and African leaders both recognise that a shift from aid to trade (and investment) would lead to job creation, economic growth and poverty reduction. While properly designed trade policies can arguably contribute to economic development, they are not an automatic mechanism for poverty reduction. Higher incomes do contribute to a reduction in the number of people living below the poverty line, but the gains made by increased trade cooperation are not distributed equally — and it is often the poor that miss out.

More than half of the population of Nigeria, Africa’s biggest economic powerhouse, continues to live below the poverty line of less than $1 per day. Shifting from aid to trade policies is unlikely to make a significant contribution to poverty reduction unless distributional policies and social investment are targeted as well. This is a major challenge for African governments who have so far refused to tackle the issue of staggering inequality.

How European trade policies fit in with poverty reduction strategies remains unclear, while some of the EU’s economic aims may even come in conflict with the poverty reduction agenda. Africa’s resource sector industries are infamous for their deleterious effects on sustainable development, and are of strategic interest for Europe.

Partnership of Equals?

Part of the intention behind the call for a shift from aid to trade is the desire for an EU-Africa relationship that is a “partnership of equals”. More than half a century after the first wave of independence, it is time to acknowledge the evolution of the EU-Africa relationship from its traditionally patronising donor-recipient arrangement towards a more egalitarian, business-like trade partnership. Yet the EU and African sides are caught up in internal contradictions regarding the roles they want to play in their relationship. The EU points out Africa’s unprecedented economic and demographic growth, at a time of European stagnation, as the key motive for a shift towards mutual obligations. At the same time, Europe insists on its right to set the agenda on economic reforms. The EU largely determined the model that Economic Partnership Agreements (EPAs) between the partners ought to follow. It also set October 2014 as a new deadline for the EPA negotiations, despite heavy criticism from the African side.

African countries seem divided on how to accept the principle of greater reciprocity as a new basis of their trade relationship. While many countries lobby hard for having an equal say at the negotiating table, there is a reluctance to accept equal obligations given existing asymmetries in economic development. In the EPA negotiations, West Africa fought hard to lower its market opening commitments from 80 percent to 70 percent vis-à-vis its European counterpart, and demanded “aid-for-trade” to be part of the agenda. It is therefore far from clear that a trade-based “partnership of equals” will lead to an increase in cooperation, or even contribute to poverty reduction.

The Way Forward

The arguments for a shift in EU-Africa relations from aid to trade are not substantive in the face of a missing causal link between economic growth and poverty reduction. An open acknowledgement of the obstacles that lie in the way of a development-oriented trade partnership is needed if the relationship is to move forward successfully. Economic policies can only contribute to poverty reduction if distributional and social policies enable so-called “pro-poor growth” — something which African countries need to prioritise if they are to take on a trade-based economic agenda. The African side’s demand for “aid-for-trade” underline that it makes little sense to treat trade as an isolated policy sector. Improving trade policies as an end in itself is pointless if you have nothing to trade, or lack the capacity to put new trade agreements into practice.

The blind spots in the recent summit declaration show that a real discussion about these fundamental preconditions is urgently needed for any trade-based partnership. A key priority for the new European Parliament elected on May 25 and the reshuffled Commission should be an increase in resources towards developing a joint strategic approach on EU-Africa trade relations.

The call for a shift from aid to trade is, however, not a lost cause. While EPAs are not exactly a success story yet, they do hint at the potential that an EU-Africa trade partnership holds for moving the development agenda forward. Not only did the prospect of greater trade openness provoke a great deal of economic and political analysis within African countries on trade policies, it has also strengthened and diversified existing trade-policy making institutions. These developments were driven forward by the African side in a proactive way rarely seen in response to past handouts of European financial aid.

Yet, for such constructive steps to be promoted systematically and successfully, European and African leaders need to clearly define the roles they are to play in a development-oriented trade partnership. Equal treatment of parties that are unequal in economic terms is likely to result in unequal outcomes at the negotiating table. The European side needs to be willing to respond to the African side’s demands — even if this means prolonging asymmetrical preferences in what cannot yet be considered a “partnership of equals” in economic terms. African leaders need to realise that they cannot have it all: balancing the desire to have equal weight at the negotiating table with demands for aid and flexibility will be a delicate, but important task for building a development-oriented trade partnership with the EU.

Clara Weinhardt is a research associate and Fabian Bohnenberger a research assistant at the Global Public Policy Institute in Berlin, and are part of its Innovation in Development team.

This article originally appeared in Le Monde Diplomatique

This post reflects the views of the authors, and may not necessarily represent those of ECDPM

Photo is courtesy of Adam Cohn

11 Jun 2014

Food and Farmers: When Public-Private Partnerships Become Corporate Takeovers


by Christine Haigh

In recent weeks, the G8 has been making the headlines as Russia’s membership is threatened by its grab of the Crimean Peninsula from Ukraine.

But the G8 club of rich countries is itself responsible for enabling another kind of takeover. A report released this week by the World Development Movement has exposed how the New Alliance for Food Security and Nutrition, a project launched by the G8 in 2012, is supporting a corporate scramble for Africa.

An example of the latest kind of public-private partnerships (PPPs), the initiative requires African countries to change their policies to facilitate the expansion of agribusiness in exchange for aid money from G8 countries and commitments from multinational companies to invest. The scheme was launched with claims that it will lift 50 million people out of poverty within a decade.

For companies like seed giant Monsanto and tax-dodging brewer SABMiller, which are looking for new sources of raw materials and markets for their products, the New Alliance promises clear benefits. But claims that the initiative will create a win-win situation are at best misguided. The New Alliance will strengthen the hand of such companies at the expense of the small-scale food producers who currently feed most of the continent. As a result, we can expect increased inequality and rising poverty among farmers.

Land-grabbing is a major threat to small-scale food producers, with female farmers often the worst affected. Million of hectares of African land have been sold or leased to foreign investors in recent years, yet as part of the New Alliance, African countries have been pushed to amend their land laws, making it even easier for big companies to take over land.

In addition, African governments are being told to reform their trade systems, committing to not restrict exports even at times of food shortage among their own people. African countries are also being pushed to curtail the ability of farmers to save and exchange seeds that they have bred themselves, forcing them instead to buy seed produced by one of a shrinking number of global seed companies.

Corporate takeover

That the New Alliance is driven by the interests of corporations is clear from the countries it has targeted. So far, ten countries are involved: Benin, Burkina Faso, Ethiopia, Ghana, the Ivory Coast, Malawi, Mozambique, Nigeria, Senegal and Tanzania. These countries are appealing places for agribusiness companies to expand, with estimated economic growth rates averaging 6.7% in 2012, compared to an average of 4.9% for sub-Saharan Africa as a whole. Most are also coastal countries, meaning easy access for imports of fertilisers and pesticides, and exports of agricultural produce.

However, only one of the countries involved − Ethiopia − features amongst the ten African countries with the worst problems of hunger. Meanwhile, landlocked countries such as Burundi, the Central African Republic and Chad, all in the bottom ten in terms of hunger, have also been ignored.

This is not the first time rich countries have dreamed up schemes that benefit themselves and attempted to pass them off as beneficial to Africans. The projects being promoted as part of the New Alliance bear a striking resemblance to the 19th Century colonial takeover. Zones known as agricultural growth corridors are being demarcated for the expansion of industrial agriculture, with infrastructure such as ports and roads mirroring (and sometimes literally building on) colonial-era railways constructed to extract resources from the continent. Such schemes are already underway in Mozambique and Tanzania, supported with aid money channeled through the New Alliance, and there are plans for similar projects in other countries including Kenya.

This time round, the justification is the need to ‘feed the world’. But the link between food production and levels of hunger is weak. The world can produce enough food for 12 billion people, yet around one billion of the seven billion people currently on the planet go hungry. In sub-Saharan Africa, food production has been rising more than the population has grown, yet under nutrition has affected more and more of people. I n the 20 years leading up to 2011, per capita food production rose by 10%, while the number of people going hungry increased by 40%.

Public-Peasant Partnerships

Currently, an estimated 70% of the global population is fed by small-scale food producers, who use no more than 30% of the world’s arable land and 20% of the fossil fuel used by agriculture. In this context, the corporate-controlled industrial model of agriculture being promoted through schemes like the New Alliance starts to look like it should be consigned to the scrapheap.

It’s not surprising therefore that farmers groups and civil society organisations from across the African continent are condemning schemes like the New Alliance as the “new wave of colonialism”. And just as Africans demanded their sovereignty in the early 20th Century, many are now demanding food sovereignty.

A framework developed by peasants, farm workers, urban food producers, pastoralists, fisherfolk and environmental groups from around the world, puts food sovereignty and people’s right to food ahead of corporate profits. It demands that those who produce food have control of the resources they need to do so. If government support for agriculture was channeled to small-scale food producers rather than multinational companies, this would be achievable. What is needed, as Mamadou Cissokho, honorary president of West African farmers network, puts it, are real PPPs: public-peasant partnerships.

For more information about the World Development Movement's campaign, click here.

Christine is policy and campaigns officer for WDM’s food speculation campaign. Follow her on twitter @christineehaigh

This post originally appeared in Think Africa Press 

The views expressed here are those of the author and not necessarily those of ECDPM 

Photo Courtesy of Oxfam International 

3 Jun 2014

Côte d’Ivoire’s EPA Between a rock and a hard place


It is commonly heard amongst trade negotiators that “no deal is better than a bad deal." This refrain probably doesn’t apply in the case of Côte d’Ivoire’s EPA negotiations with the EU where no agreement would turn out to be a very bad deal for many of their leading exporters, especially of agricultural products. The Côte d’Ivoire Government is working with its civil society, business and government partners throughout West Africa and at home to find a solution.

When senior officials and chief negotiators from West Africa and the EU reached a deal on a regional EPA earlier this year, it appeared to be a result which guaranteed market access to the EU while reinforcing West Africa’s trade integration.  However, the signature of this agreement has since been delayed and its content is being called into question as Nigeria and other countries assess whether the deal is in the interest of their economies. 

If key partners in the West African region choose not to sign and implement the regional EPA, Côte d’Ivoire will face a daunting choice – lose its preferential access to the European market or undermine its regional integration with West Africa under the ECOWAS Trade Liberalisation Scheme (ETLS).  It is a very difficult position for a country which prides itself as both the motor for integration in West Africa and the region’s biggest (non-oil) exporter to Europe. 
The Ministry for African Integration (which is responsible for EPA negotiations as well as West African regional integration) has a very clear view on this potential dilemma.  “Our Leaders have given us a mandate to negotiate a regional EPA which promotes development and reinforces regional integration in West Africa” says Stéphane Aka Anghi, Conseiller Technique at the Ministry of African Integration, “as long as a regional EPA remains on the agenda, it is our plan A, B and C”.

Market access to the European Union

Côte d’Ivoire officials are acutely aware of what they stand to lose if no reciprocal free trade agreement is reached with the EU by October 2014.  Chief among their concerns is preferential access to the EU for their main exports including cocoa, bananas, wood, tuna and a range of other products.

Without continued duty-free quota-free access to the EU market, these industries could disappear or, at the very least, they would suffer drastic reductions in exports.  Exports of these products at preferential rates account for one third of Côte d’Ivoire’s total exports to Europe and generate millions of jobs, especially in vulnerable rural communities.

In the case of tuna and the four canneries which the industry supports in Côte d’Ivoire, exports to the EU are the backbone of the business.  With trade preferences removed, and no EPA in place, tariffs would rise from zero percent to over 20 percent – a move that could wipe out the entirety of Côte d’Ivoire’s exports to Europe.  Ivorian industry is already coming under increased competition due to preference erosion with respect to some competitor countries, such as South Korea which can now export tuna at a tariff of 12 percent under the EU-Korea FTA. 
However, failure to reach a deal would not just undermine Côte d’Ivoire’s exports of primary products to Europe - it could also reverse the industrialisation process already underway in some sectors.  The case of cocoa illustrates the dilemma they are facing. 

Côte d’Ivoire is the world’s leading producer of cocoa (it is responsible for around one third of global production) and the sector is directly or indirectly responsible for millions of livelihoods in the country.  Côte d’Ivoire is currently using its comparative advantage in cocoa to move up the value chain and start exporting value-added cocoa products.  While this process is in its infancy, it is a promising sector which could create higher paying industrial jobs and contribute to the country’s development. 

If Côte d’Ivoire finds itself under the Generalised System of Preferences (GSP) later this year, its cocoa industry will certainly survive in some form.  However, the high tariffs in the form of mixed or specific duties on finished chocolate products, as well as the 9.6 percent ad valorem rate for cocoa paste, would drive Côte d’Ivoire back down the value chain to being a mere commodities exporter (with duty-free entry for cocoa beans).

Solidarity with the West African region

It is too early to start thinking about a plan B and Côte d’Ivoire continues to invest fully in reaching agreement on a regional EPA which preserves its market access to Europe and strengthens regional integration.  However, many actors in the region are starting to think about what might happen if the regional deal falls through and various ECOWAS countries, including Côte d’Ivoire, start to seriously consider bilateral deals with the EU.

Such bilateral deals, rather than a region-wide EPA, would make the West African common market unworkable and Côte d’Ivoire could lose many of the benefits it currently enjoys under the ETLS.  These benefits include preferential access into the markets of other West African countries for products which have been approved under the ETLS. 

Côte d’Ivoire understands the importance of West Africa’s regional integration - it has played a key role in driving the process and is responsible for around one quarter of trade in the region.  Further, for some of its industries, and especially for processed and industrial products, West Africa represents a much more significant market than Europe. 

For the Grand Moulins d’Abidjan, with their towers visible from all around the city, any move away from Côte d’Ivoire’s integration with West Africa would be disastrous.  They do not export to the EU, but harvest one fifth of their turnover from trade in West Africa.  Flour is a highly sensitive product in the region and their preferential access to markets is thanks to the ETLS. 

Each country in the region has to manage its own nuances and trade interests.  For example, Ghana is at a similar stage of development to Côte d’Ivoire and is facing a similar dilemma, however it has a different export profile and this has influenced its approach to EPA negotiations.  Ghana’s overall exports to the EU are worth only half of what Côte d’Ivoire exports.  Moreover Ghana has gone further along the path of producing industrial products for the West African market and has developed a range of employment-generating sectors such as plastics, pharmaceuticals and wood and furniture products. 

Nevertheless, the failure to reach a deal in the EPA negotiations would see Ghana lose access to the EU market for certain key commodities such as bananas, tuna and cocoa.  Despite the importance of the regional market for Ghana’s processed products, it would be unlikely to seriously consider any outcome which resulted in lost access to Europe for these important commodities.

Fragmentation of West African trade policy

Many in West Africa argue that if a regional EPA cannot be delivered then Côte d’Ivoire should sacrifice its access to the EU market and prioritise regional integration under the ETLS.  Nigeria adopted a similar path when it chose not to sign an interim EPA in 2007 and saw its preferential access to the EU downgraded from the Cotonou regime to the less-generous GSP. 

However, the trade flows suggest that this would be a much more difficult decision for Côte d’Ivoire as it is responsible for almost forty percent of West Africa’s non-oil exports to the EU.  Despite the much larger size of its overall economy, Nigeria’s non-oil exports to the EU are worth only one third of what Côte d’Ivoire exports.  In addition, Côte d’Ivoire trades more in those products covered by Cotonou but excluded from the GSP (such as cocoa and bananas), compared to Nigeria’s overwhelming reliance on petrol exports to the EU which remain duty free even under the GSP regime.

While a bilateral EPA between Côte d’Ivoire and the EU would undermine West Africa’s goal of integration, the reality is that trade policy has been fragmented in the region since the EU’s Cotonou regime was found to be inconsistent with WTO rules in the 1990s. 

Out of 16 countries in West Africa (the 15 members of ECOWAS plus Mauritania which has joined the bloc for the purpose of EPA negotiations), 12 are currently classified as LDCs and qualify for duty-free quota-free treatment under the EU’s “Everything But Arms” regime.  These countries have tended to be less supportive of opening their markets to competition from Europe as they have little risk of losing preferential access to the EU in the near future.  Nevertheless, these countries aspire to graduating from LDC status and would be adversely affected by any developments, which undermine ECOWAS trade integration. 

Cape Verde, which graduated from LDC status in 2008, exports to the EU under a regime which no other West African country shares.  In December 2011, it became the first African country to gain GSP+ access to the EU market, though this access must be regularly renegotiated and it remains conditional on satisfying certain criteria relating to human rights, labour rights and the environment. 

Nigeria has been under the GSP scheme since 2007 and Ghana and Côte d’Ivoire have had their duty-free quota-free preferences extended since they initialled interim EPAs in December 2007. 

Even if Côte d’Ivoire and other non-LDCs in the region renounce the EPA with the EU, they would still be a long way from having a harmonised and coherent trade policy in West Africa.  There would be several different regimes governing trade relations with their most important export destination - the European Union.  Further, some countries in the region have already started entering into bilateral deals with other trade partners.

Conclusion

The next few months will be critical in determining the future of trade policy in West Africa, especially with regard to access to the European market and regional integration under the ETLS.  Notwithstanding the different circumstances in each of their economies, ECOWAS countries are working hard with their civil society, business groups and development partners to find a solution.

No deal in the EPA negotiations may turn out to be a very bad deal for key industries in Côte d’Ivoire and other ECOWAS countries.  They have a strong interest in finding a way to retain an integrated West African region with continued access to the European market. 

Ben Czapnik is an Adviser for the International Trade Centre. He has worked with the government, private sector and civil society of Côte d’Ivoire on EPA and regional integration issues under the Programme d’Appui au Commerce et à l’Intégration Régionale (PACIR)

This article initially appeared in ICTSD's Bridges Africa, Volume 3 - Number 5

The Photo is courtesy of Desomurchu Archive Gallery

The views expressed herein are those of the author and do not necessarily reflect the views of ECDPM