The minister said that the success of the planned
interconnectivity project depended on the number of participants.
He hoped that both the cable and the backhaul connectivity would
be managed in mutually acceptable co-ownership arrangements, in
compliance with the rights of access of landlocked countries to
and from the sea, and freedom of transit as proposed in the UN and
AU conventions.
He concluded that the global economy was in a ‘digital
age’ and information was the primary resource for economic
development, at both national and regional levels. Without reliable
and cost effective interconnectivity, Africa would be unable to
compete in the global marketplace.
(The Ethiopian Reporter, 17.06.05)
A long way to go for Ethiopia
On a flat, 20 hectare site south-west of Addis
Ababa, dozens of women in straw hats and men in baseball caps dig
trenches, laying the groundwork for the latest entrant in a multi-million-dollar
industry that is starting to bloom in the Horn of Africa.
In just a few months, orange and pink roses should
be poking through the earth and another flower farm will be up and
running, part of a horticultural sector emerging in a nation more
often associated with famine than business.
Ethiopia's flower industry is a success but many
more are needed, says a western diplomat. Just to "stop the
boat sinking" will take 10 years, and billions of dollars of
investment will be needed to bring the country to African standards,
says Ishac Diwan, the World Bank's Country Director.
Twenty years after pictures of Ethiopian famine
were beamed around the globe, the country still has much to do to
shake off its image as a nation of starving children. Ethiopia is
an extreme example of the development challenges facing Africa,
with at least 5 million people needing food aid to survive. Donors
also acknowledge that they have made mistakes, belatedly realising
that simply giving food ignores the root causes of the problems,
undermines domestic markets and often creates an environment of
dependency.
But as Paul Wolfowitz, the new president of the
World Bank, tours Africa for the first time, hopes are rising that
Ethiopia and its poor neighbours may be at a turning point. At the
weekend, the Group of Eight wealthy industrialised nations agreed
to wipe out more than $40bn of the debt that 18 African countries,
including Ethiopia, owe the World Bank, International Monetary Fund
and African Development Bank.
But even with debt relief and recent increases
in aid, billions more dollars will be needed to build infrastructure
and generate sustainable growth. Equally important, the Ethiopian
government needs to do more to stimulate the private sector and
improve the investment climate.
Horticulture is one area where private sector reforms
have succeeded. Three years ago there was only a handful of flower
producers. Now the Ethiopian Horticulture Producers and Exporters
Association has 32 members, 45 per cent of whom are foreign investors
Flower producers can import goods duty-free, enjoy
a five-year income tax exemption and lease land from the government
at competitive rates. It is expected that the country would be able
to attract foreign companies to take advantage of the good climate,
cheap land and freight rates, and the overall investment conditions
to contribute meaningfully to the development, especially of the
horticulture sector.
The government, in power since 1991, has been praised
for reforms in a nation blighted by mass poverty, under-development
and perennial drought. But it has also been criticised for being
over-cautious, retaining too much economic control and refusing
to shed the Marxist- Leninist ideology that surrounds many of its
leaders, including Meles Zenawi, the Prime Minister.
On most indicators, Ethiopia lags far behind the rest of the continent.
It has a mere 50cm of road per head compared with the continent's
average of five metres; water storage capacity is only 42 cubic
metres a head against an African norm of 600.
Mr Diwan, the World Bank's country director, concedes the environment
is difficult. ‘To have just good policies is not enough here
... you have to have very good policies’, he says.
Donors have shown their willingness to support
the reforms by lifting funding to $900m from $600m three years ago.
The goal is to raise it to $2bn in three years, says Mr Diwan. But
progress is slow, with average per capita income still $100 a year.
A workers at the flower farm earns less than $1 a day.
In spite of serious questions about the government's
human rights record, the assistance is still flowing. This year,
under a $190m-a-year cash and food-for-work programme, about 5m
people living in unsustainable areas will work on state projects
in return for money or food.
Government officials acknowledge progress on development
has been slow, blaming political divisions, the war with Eritrea
and other reasons. They say the country is now on the right path
but needs more support.
(Financial Times, 15.06.05)
Mobile markets boost cross-border trade
Although many settlers along
the Zambian border are viable farmers, their daily problem is to
find buyers who will give them a fair price for their products.
This problem has now been solved in the Lundazi district of Eastern
Province in Zambia, through an initiative of the Malawian government:
a mobile cross-border market.
At least three times a week, the market, which
keeps shifting camps from one place to another along the Zambia-Malawi
border, attracts traders from the three countries of Malawi, Zambia
and Tanzania. It is similar to the town centre market in Lusaka,
except that even cars and bicycles are on sale. In fact, anything
you might desire is available: concoctions which go side by side
with divining services provided by the witch doctors, electrical
appliances like television sets and radios, bicycle and car spare
parts, dry cell batteries, cellular phones, razor blades, clothes.
You name it and you can get it.
The market operates from 05:00 hours to 20:00 hours
before the traders relocate to another place in readiness for another
business day. As an initiative of the Malawian government, the currency
favoured is the Malawian Kwacha, which is 50 times stronger than
the Zambian currency.
The main problem is communication. The language
widely spoken is a Malawian version of ci-Chewa, where a lot of
Chewa and Tumbuka words have been modified. Sign language is usually
the last resort.
The market has been commended for empowering people
so that they can buy and sell commodities at reasonable prices without
being exploited. The only disadvantage is the alleged criminal and
immoral activities that take place: thefts, violence and sexual
activity, possibly due to excessive smoking and drinking. Geoffrey
Chikunjiko, Executive Director of Thandizani, a community-based
project fighting the HIV/AIDS pandemic in Lundazi, says, “The
mobile cross-border programme is a high risk group that we are targeting
in our HIV/AIDS programmes.”
Malawian authorities have to rely on intelligence
and not identity cards to tell who is not a Malawian. Malawians
do not carry identity documents unless they are leaving the country.
This means that police officers have their work cut out to maintain
law and order at the massive market and identify where the perpetrators
of criminal activities come from before they can send them back
to their own countries.
(Times of Zambia, 27.06.2005)
Malawi budget ‘to
trigger inflation’
There are strong fears among
economic analysts that Malawi’s pending budget (2005-06),
which is pegged at Kwacha 113 billion (euro 761 million), will push
inflation further upwards, raising commodity prices to unsustainable
levels especially for the impoverished masses.
Last year’s budget, presented on 3 September
2004, was pegged at Malawi kwacha 89.8 billion (euro 605 million)
and the Minister of Finance then said inflation would go up to 20
percent by June this year. He promised that inflation would then
start to drop thereafter. However, month-to-month inflation since
then has been rising relentlessly. According to Malawi’s National
Statistical Office (NSO), month-month inflation is now hovering
at around 14 percent.
Several Malawian economic analysts have predicted
that inflation would skyrocket on account of the shortages of the
country’s staple food, maize as well as the introduction of
the Malawi Rural Development Fund (MARDEF), which has been increased
to Kwacha 5 billion from Kwacha 1 billion.
The Standard Banking Group of South Africa has
said that average inflation for 2005 will be pegged at 14.9 percent.
The bank had earlier estimated a lower average inflation rate of
10.6 percent for 2005 but has felt compelled to hike the rate upwards
due to higher than anticipated food prices.
The country is currently in the midst of a food
shortage, especially the staple crop maize, which contributes about
60 percent to the Consumer Price Index (CPI).
Malawi’s government has planned to import
250,000 tonnes of maize, of which 150,000 would be for humanitarian
aid and 100,000 for commercial purposes. Money amounting to kwacha
5.2 billion is to be set aside for the importation of the staple
crop. The Agriculture Ministry estimates the shortage to be 430,000
tonnes whereas NSO says the deficit stands currently at 900,000
tonnes.
The economic lobby group, the Malawi Economic
Justice Network (MEJN) anticipates inflation to go up because there
would be more money in circulation and shortage of food. Both MARDF
and the shortage of maize, they believe would trigger off a higher
rate of inflation.
Observers believe that the buying of maize would
create a forex imbalance as more money is going to be used up for
the purchase of maize. Further, fuel prices, which have been going
up internationally will also add onto the pressures of inflation.
Commodity prices have been on an upward spiral
for the past months owing to the anticipated month-to-month inflation
increase.
This is having a direct adverse impact on most
of Malawians’ disposable incomes. Rising inflation will adversely
affect more than 75 percent of the country’s population who
live on less that one dollar a day (approximately Kwacha 113).
(The Chronicle, 19.05.05)
Need for food standard monitoring felt
‘The recent ban on imported
mineral water is a tacit recognition that lack of sanitary control
on specific products may entail significant risks to consumers’
health’, observes Mosadeq Sahebdin of the Institute of Consumer
Protection (ICP), a leading consumer organisation of the Island
country. This brings to the public agenda the dire need for an agency
responsible for ensuring food standards.
Mr. Sahebdin underlines that the mandate of such
an agency would be to provide a platform to ensure coordination
among the different agencies and to ensure traceability in case
of contamination. ICP’s concern is based on the report that
the Ministry of Health has seized imported bottled water from Malaysia.
The bottled water was blocked at the Customs since
a few months and were banned in the local market. The importers
and retailers could not understand such a decision until they were
told that such bottled water was found unfit for consumption after
tests carried out by the Ministry’s laboratory.
(News on Sunday, 01.07.05)
Sugar Protocol: a big blow to producers
Mauritius has expressed its dismay over the announcement
of the 39% drop in sugar export prices to EU. If the reform comes
into force in November, this will have a dramatic effect on the
sector and the people depending on it, from all the Africa-Caribbean-Pacific
(ACP) countries.
A fall in the sugar export prices was expected.
It was even thought that the decrease could be of 42%. Yet the European
Commission (EC)'s announcement of a fall of 39% has had a strong
impact on the sugar industry in Mauritius and all other ACP countries.
Not only is this decrease high, but it will range over four years
as well.
Such a reform means that the price Mauritius is
selling its sugar on the EU market will go from 523 euros now to
319 euros in 2009-2010. The first fall will be effective as from
1st July 2006 and the next a year later. The Mnister of Agriculture,
Nando Bodha, has expressed his strong disappointment about the announcement
made by European Commissioner, Marianne Fishler-Boel. "Such
a decrease is unacceptable and unbearable. We can lower our production
costs and we have already started a restructuring plan. But, for
the industry to remain viable, the price proposed to us should be
higher than our production costs after restructuring."
ACP countries are just as disappointed by the EU
proposal, which "would have a crippling effect on their economies,
traditionally supplying sugar to the EU under the provisions and
guarantees of the ACP-EU Sugar Protocol. In addition to price cuts,
the proposal would also impose new marketing restrictions on ACP
suppliers, against the spirit and letter of the Sugar Protocol."
Mauritius and its partners in the ACP group knew
perfectly well that the sugar reform was inevitable. However, they
thought the commission would understand the difficulties they have
to face with a drastic decrease and would take all this into account
when making their final proposal.
The only hope now lies in the Commission's legal
department. It is in November that the bill will be introduced to
the commission; and hopes are high that the bill might be amended
before being adopted. But the commission has never taken a step
backwards in its sugar reform. Why should it change the way it has
dealt with the issue so far?
The Secretary General of the Chamber of Agriculture,
Jean-Noà Humbert, has expressed his dismay at the news. "The
Commission wants to go too far, too quickly. If the bill is presented
as it is, it will have a dramatic impact on the sugar industry and
the people depending on this sector of the economy."
Small planters will be the first affected. In this
context, they have already shown their anxiety. Many have the feeling
that they will soon see their jobs disappear.
Jean-Noà Humbert has also taken a stand
over the EU financial compensation to ACP countries. In fact, all
sugar producers for the EU - including the European beet sugar producers
- have complained about the proposal. Except that the same beet
sugar producers will benefit from a compensation corresponding to
60% of the price decrease, which means the drop will be of 16% only.
As for ACP countries, the EC plans to give only 40 million euros
to the whole group, which Mr. Humbert finds unfair.
In a press release, ACP countries have urged the
EU member states to agree to considerably less drastic price cuts
that would be gradually phased-in over a period of eight years as
from 2008 along with accompanying measures to support the restructuring
and modernization of ACP sugar industries. The ACP preference is
for putting the focus on maintaining sustainable development through
trade rather than creating another aid mechanism.
France has already shown that it is sceptical about
Marianne Fischer-Boel's proposal This could well help ACP countries
in their battle!
(L’ Express, 28.06.05)
US quotas on Chinese
textile brings back smiles
Mauritius' textile industry has
welcomed a decision by the United States to impose quotas on Chinese
garment exports, saying that the move would protect its access to
the US markets.
The US government decided recently to reintroduce
quotas on several textile products to counter what Washington says
is a surge in imports from cheap producers in China.
Mauritius hopes the quotas will prevent Chinese
manufacturers from edging them out of contracts with key US clients.
"We are very happy about this decision," said Ahmed Parkar,
chairman of the Mauritius Export Processing Zone Association, an
umbrella organisation for the Indian Ocean island's textile and
garment industry. Mauritius exported garments worth 7.3 billion
Mauritian Rupees in 2004, down from a figure of 8.4 billion Mauritian
Rupees in 2003, according to figures from the Central Statistics
Office.
The Mauritius textiles industry directly employs
68 000 people, with about 250 000 indirectly employed in a sector
contributing about nine per cent of gross domestic product.
The quotas will limit China's exports to the United
States of the specified garments to 7.5 per cent growth per year.
With Mauritius' garment exports to the United States
declining, the quotas have rekindled hopes among exporters that
they may regain a slice of the US market. ‘This is great news
for Mauritius. It will give our industry a breathing space’,
said Peter Craig, the commercial representative for Mauritius in
Washington.
‘It will have a snowball effect. Other countries
like the European Union may follow the USA and impose quotas on
Chinese garments.’ In January, a global quota system that
helped Africa's textile sector flourish, ended, raising fears that
an onslaught of cheap Chinese textiles would wipe out its business.
(The Namibian, 18.05.05)
USA Mozambique boost trade ties
US Trade Representative Rob Portman
and the Mozambican Minister of Industry and Commerce Antonio Fernando
have recently signed a Trade and Investment Framework Agreement
(TIFA). It is hoped that the TIFA will develop the bilateral trade
and investment relationship between the two countries and build
on the recent enactment of the US-Mozambique Bilateral Investment
Treaty (BIT).
Portman praised Mozambique’s impressive track
record on democracy, political stability, economic growth, openness
to foreign direct investment, and expanding exports. Deputy US Trade
Representative, Josette Sheeran Shiner, also commented on the advantages
inherent in signing the TIFA. She described it as a mechanism for
improving the US-Mozambican trade relationship, exploring common
objectives, reviewing options, and investigating possibilities for
greater cooperation and a more comprehensive trade and investment
dialogue.
As part of the TIFA, a United States-Mozambican
Council on Trade and Investment will be formed to address a wide
range of trade and investment issues, including trade capacity building,
intellectual property, labour, environmental issues, participation
of small and medium sized enterprises in trade and investment, dialogue
focused on increasing commercial and investment opportunities.
In Sub-Saharan Africa, the United States has TIFAs
with South Africa, Nigeria, Ghana, the Common Market for Eastern
and Southern Africa (COMESA), and the West African Economic and
Monetary Union (WAEMU/UEMOA).
Since the civil war ended in 1992, Mozambique has
shown itself to be an international model of war-to-peace transition.
Economic growth has been maintained at a rate of 8 percent as a
result of market-oriented reforms implemented over the last years.
The country intends expanding its exports to the US and developing
its tourism industry. For its part, the USA is working towards opening
markets globally, regionally, and bilaterally and expanding American
opportunities in overseas markets.
(www.bilaterals.org, 27.06.05)
Support for CFA Proposals
Mozambique has confirmed its
support for the conclusions of the report from the Commission for
Africa, set up on the initiative of British Prime Minister, Tony
Blair.
A statement from Mozambican President Armando Guebuza,
distributed to journalists covering the summit of the African Union
(AU) in the Libyan city of Sirte, pledged support for the Commission
position, shared by the British government itself, on poverty reduction
in Africa.
That position has three components - debt relief,
doubling of development aid, and removal of trade barriers.
Guebuza met with the British Minister for Overseas
Development, Hilary Benn, and reiterated that the objectives expressed
in Commission for Africa's report coincide with the economic and
social development objectives laid down by the Mozambican government.
Guebuza believed that the report complemented NEPAD
(New Partnership for Africa's Development). He thought it ‘fundamental’
that the Commission's recommendations ‘be implemented as soon
as possible and in an efficient manner so that they may have an
impact on the lives of Africa's peoples’. On the debt relief
announced in June by the Finance Ministers of the G8 group of most
industrialised nations, Guebuza said it was ‘an important
contribution to the fight against poverty’.
The relief announced is the cancellation of debts
owed to the World Bank, the IMF and the African Development Bank
by the 18 countries that have qualified for the second, ‘enhanced’
phase of the HIPC (Heavily Indebted Poor Countries) initiative,
14 of which are in Africa, including Mozambique.
Full details of the relief are not entirely clear.
Although the write-off is said to cover 100 per cent of the debts,
presumably it will not include the most recent loans from the three
institutions.
According to the British Treasury, the full amount
of Mozambican debt cancelled under this deal is 2.3 billion US dollars.
(Agencia de Informacao de Mocambique, 05.07.05)
Mozambican Cashew industry
on road to revival
Mozambican President Armando
Guebuza, unveiled a new brand of Mozambican cashew nuts, ‘Zambique’,
for its first export sale to a US buyer, the company Suntree.
It has been claimed that the expansion of Zambique
brand to the US market would offer a successful small and medium
enterprise model for overcoming the challenges of poverty, and expanding
products to American consumers". The US non-profit organisation
Technoserve, which has been providing training on entrepreneurship
development to the Mozambican cashew, has been praised highly by
the President himself for showing the path for business development
to the country’s entrepreneurs.
Technoserve, however, gives an entirely inaccurate
picture of the Mozambican economy and of the cashew sector in particular,
in a communiqué released recently. It makes the extraordinary
claim that ‘Cashew nut production is Mozambique's single largest
industry’ – a reality of the 1970s - cashew processing
has contracted dramatically in the country after the 1990s. Currently
by far the largest industry in Mozambique is aluminium followed
by natural gas.
All the large scale cashew processing plants in
Mozambique (all of then owned by private entrepreneurs) were driven
out of business following the World Bank's dictat of 1995 that the
government remove protection from the industry. Unable to operate
in the liberalised environment imposed by the World Bank, one by
one the large mechanised processing factories closed their doors.
The last one closed in 2003. That was 50 million dollars worth of
investment thrown away by the World Bank's blind pursuit of free
trade ideology.
Cashew processing is now undertaken by several
small companies using manual methods to shell the nuts. 12 of these
small companies are in the Mozambican Cashew Industry Association
(AICAJU), with another three or four just starting up their factories.
According to Carlos Costa, Chairperson of the Mozambique
Cashew Industry Association (AICAJU) the maximum possible exports
from the 12 AICAJU companies currently amount to 2,400 tonnes a
year. This is half the volume the industry could export in the late
nineties.
After 1998, there was a collapse in exports, as
large companies were forced to close their doors. In 2003, just
339 tonnes of cashew kernels were exported, and 453 tonnes in 2004.
There has been a net loss of about 7,000 jobs over the period.
In other words, the revival of the cashew industry
is so far modest, and Technoserve's talk of increased employment
shows a striking ignorance of the history of the industry.
The Technoserve release quoted the organisation's
President, Bruce McNamer, as saying ‘The cashew story in Mozambique
is both transformational and inspirational. The cashew industry
was in such deep decline many years ago that very few had the foresight
and strength to press forward - yet this story illustrates that
wise and targeted foreign assistance, perseverance, good business
sense, and market planning makes a clear-cut difference.’
The cashew industry, like much of the Mozambican
economy, did indeed go into steep decline during the war of destabilisation.
But once the war was over, there were Mozambican entrepreneurs who
had ‘the foresight and strength’ to buy the cashew factories
- only to find the rug pulled out from under their feet when the
World Bank insisted that the rules under which they had entered
the industry be radically changed.
(Agencia de Informacao de Mocambique, 24.06.05)
Government keen on transfer pricing
The latest buzzword in local
tax circles is 'transfer pricing'. What is it and how will it affect
you? For some time now the Minister of Finance has been concerned
that the Namibian tax base is not delivering to its full potential.
Various budget speeches over last few years have
made reference to this fact and it did not come as a surprise when
the review of the Namibian tax system identified the introduction
of transfer pricing as a potential revenue source for the state
coffers. Transfer pricing legislation seeks to address the manipulation
of profits between connected parties where the transacting parties
are located in different countries.
Transfer pricing legislation will therefore not
affect the tax position of individuals who receive income by way
of employment. The current corporate tax rate in Namibia is 35 per
cent compared to the South African corporate tax rate of 30 per
cent and the Botswana tax rate of 15 per cent. Typically, head offices
of companies located in these countries raise a management or administration
fee on the Namibian company to siphon off the Namibian profits so
it is not taxed in Namibia but rather in one of these territories.
The fee usually fluctuates with the profits recorded
by the Namibian enterprise and is calculated on the basis of a percentage
of the turnover or net profit.
The wording of the Namibian transfer pricing legislation
follows the international trend to address the manipulation of the
price of goods and the provision of finance at a non-commercial
interest rate. The transfer pricing section will be introduced as
section 95A of the Income Tax Act when the 2004 Tax Amendment Bill
becomes law during the course of the year.
The section empowers the ‘Receiver of Revenue’
is challenge the price of goods or services supplied between connected
persons where the pricing is either lower or higher than the price
for similar goods or services supplied between independent persons
dealing at arm's length. If the price is successfully challenged,
the Receiver has the power to determine the taxable income of the
Namibian taxpayer by adjusting the consideration of the international
transaction to reflect an arm's length price for the goods or services
supplied.
The section also empowers the ‘Receiver of
Revenue’ to challenge the interest rate applied to financial
assistance granted by a non-resident to a resident where the parties
are connected to each other. The excessive interest paid to the
non-resident in respect of the financial assistance granted will
not be allowed as a deduction to determine the taxable income of
the Namibian taxpayer. Revenue Authorities make use of the Amadeus
database to determine the arm's length price for transactions they
wish to challenge. This database provides comparable prices for
particular circumstances and is used successfully worldwide where
similar legislation has been introduced.
If you thought this is pie-in-the-sky stuff and
the ‘Receiver of Revenue’ will find it difficult to
implement, think again. The experience of other countries is there
for Namibia to follow and learn from. In South Africa taxpayers
are currently being questioned by the South African Revenue Services
in respect of their transfer pricing policies being backdated to
when the legislation was introduced in 1997. You would be well advised
to prepare yourself adequately for a future Revenue inquiry.
(The Namibian, 23.05.05)
Unfair competition for
local businesses
The northern business community has called on
the National Chamber of Commerce and Industry (NCCI) to stop ‘talk,
talk’ and seriously address critical issues that affect their
business.
The NCCI management team, which visited its northern
branch at Ongwediva, came under fire from a businessman who described
the chamber as a ‘talk, talk’ institution that is not
seriously addressing their problems. The businessman said it does
not help for the NCCI to keep ‘talk, talk’ if there
are no laws that can help them. SMEs are not fairly benefiting from
the awarding of tenders by regional tender boards, because of the
lack of laws to protect them. The big companies, he said, are ‘killing
us (SMEs) before we even start to grow’.
He called for Black Economic Empowerment (BEE)
legislation so that the previously disadvantaged can benefit from
the concept. The members of the NCCI northern branch, one of its
biggest branches, called on the chamber to use its influence and
‘speak up’ on issues affecting them and they in turn
would support the chamber 100 percent. Specifically citing Chinese
businesses, the members spoke out against the ‘unfair competition’
posed by foreign companies. One businessman said these foreign companies
are flooding the Namibian market with inferior products, which Namibians
can provide at superior level or quality.
Since nothing is being done about it, the business
community gets the feeling that government is supporting these companies.
‘The Chinese are killing the nation’, said a businesswoman.
It has been suggested that someone should represent the business
community in the Parliament to help influence government's decisions,
because parliamentarians are not businesspeople but politicians.
The issue of the ban on Japanese vehicles was also
raised. Members demanded to know what the NCCI is doing about it,
with one businessman saying the ban is unfair because the Japanese
vehicle trade was helping the poor. The unfavourable trade environment
in neighbouring Angola also came under the spotlight.
The requirement that Namibian business people wanting
to operate in Angola should form business partnerships with their
Angolan counterparts has been repeatedly raised as a critical issue
that needs to be looked at, as some of the Angolan counterparts
have been described as dishonest and untrustworthy partners.
There is also the issue of corrupt officers who
are charging exorbitant tariffs at the border. NCCI's chief executive
officer Tarah Shaanika said the chamber understood the frustration
of the business people and those who had lost money while doing
business in Angola. He however urged them not to lose sight of the
many opportunities available, but to continue doing business in
Angola.
Shaanika said the business community needs to be
cognisant of the fact that Angola just recently came out of war
and the Angolan government is overwhelmed with many problems, adding
that it would take time for the situation to change. The CEO said
the chamber would take up the ‘Chinese issue’ with the
government. On the Japanese vehicle ban, Shaanika said the NCCI
has already taken up the matter with the government.
He said the Ministry of Trade and Industry has
committed itself to visiting some towns and enlighten business communities
on the decision by government to ban Japanese vehicle imports.
(New Era, 16.05.05)
Reducing beef industry
imbalance
The imbalances of the past continue
in the country's beef industry, and as a result farmers north of
the so-called 'redline' veterinary cordon fence feel marginalised
in terms of meat marketing to international markets.
More than a decade after Namibia achieved independence,
meat from the northern communal areas (NCA) of Oshana, Ohangwena,
Omusati, Oshikoto, Kunene, Kavango and Caprivi has failed to gain
access to the European market, unlike meat produced in the commercial
farming areas south of the cordon fence.
The explanation given by the authorities is that
animals in the NCA are yet to be declared free of foot-and-mouth
disease (FMD) and the uncontrolled movement of animals across the
Namibia-Angola border is blamed for spreading livestock diseases.
The Meat Board's Livestock Management Project asserts that livestock
north of the fence are rarely vaccinated, unlike in the commercial
farming areas, and the industry would face disaster if there was
an outbreak of any disease in the commercial areas.
The northern farmers have strongly reacted to this
and reported that FMD occurred last in the northern regions of Oshikoto,
Ohangwena, Oshana, Omusati, Kunene and Kavango in 1964, and therefore,
these regions should be regarded as FMD free, and kept under strict
surveillance to eradicate any possibility of occurrence of the dreaded
FMD
Development of ‘self-quarantine farms’
is being proposed on a pilot-scale by the northern farmers associations,
as means to introduce a system of strict surveillance. A farmer
applying for a self-quarantine farm should be required to erect
a three metre high fence with a buffer strip around his farm and
divide it into various grazing camps with enough water supplies.
According to this self-quarantine proposal, farmers would also be
required to provide farm workers with fenced-off compounds for houses,
water and toilet facilities.
Before certification is done by the veterinary
service officials, livestock of ‘self quarantine’ farm
have to be vaccinated against FMD and checked for other diseases
and conditions. The Agricultural Bank (AgriBank) of Namibia will
be entrusted to grant loans to the concerned farmers to buy materials
in order to improve the infrastructure of their farms.
Further, according to this proposal, owners would
be obliged not to bring other livestock into self-quarantined farms
without the consent of the authority on one hand, while on the other
hand the veterinary officials will be required to conduct regular
visits to the farms.
Northern farmers strongly believe that the proposed
self-quarantine farms system is expected to contribute to the development
of the livestock industry in the communal areas, and remove the
imbalance that exists in the country’s beef industry.
(The Namibian, 23.06.05)
Celtel sues Uganda Telecom
Mobile telephone giants, Celtel and Uganda Telecom
(UTl), are locked up in a legal battle amounting to Uganda Shilling
(Ush) 2.9 billion of interconnection fees. Celtel dragged UTl to
the Commercial Court seeking payment of USh2.9b, which UTl has not
paid since 2001.
Celtel's lawyers, Musoke Shonubi and Company Advocates
claim that from 2001 to date, the two companies have utilised each
other's services and infrastructure for connecting telephone calls
across their networks for a cost, which UTl has ignored.
The two companies had earlier agreed to charge
for the interconnection according to tariff recordings. It was also
agreed that the traffic minutes would be arrived at by obtaining
an average between the minutes recorded by either party.
(The New Vision, 30.06.05)
Postal sector gears up
to face competitors
POSTAL managers from the Common
Market for East and Southern Africa (COMESA) member countries have
started deliberations on how to transform the region's postal services
into a robust and viable sector.
The discussions also aim to draw strategies to
respond effectively to the emerging technological developments that
are making the traditional postal services irrelevant and also try
to identify the best practices for national regulatory structures.
Addressing managers recently, COMESA’s Acting
Secretary General, Mr Sindiso Ngwenya, said the future of postal
services depends on the power of the managers to harness and exploit
information and communication technologies (ICTs) developments that
are rapidly changing the business environment.
Such an effort will perhaps involve rethinking
the way postal entities have been conducting their business and
expanding the portfolio of activities with a particular emphasis
on those that utilise ICTs to compensate for the loss caused by
the introduction of cell phones and email services.
Postal companies have progressively registered
less turnovers as mobile and email use penetrates deeper almost
eliminating the tradition of letter writing.
Posta Uganda, which was created after the government's
unbundling of Uganda Posts and Telecommunications (UP&T) Limited
has started in earnest to adapt to a rapidly changing environment,
responding to the evolving technological challenges by entering
into airtime retail partnerships with mobile phone companies.
Upon realisation of the growing preference for
electronic messaging, it also quickly ventured into the Internet
business, starting up a ‘café’. With the liberalisation
of the sector and subsequent proliferation of the private carriers,
Posta also reorganised and increased the speed of parcel processing
and delivery.
Ngwenya said postal organisations must transform
their vast resource (labour, capital, materials and information)
accumulated before the onset of ICTs into products and services
that meet the needs of a value-added obsessed modern market.
Experts observe that the provision of postal services
under monopolistic conditions should be discouraged. It is being
felt that competition brings vigour, commitment to quality, spurs
innovation and therefore should be encouraged for the overall development
of African economies.
(The Monitor, 29.06.05)
Migereko woos investors
on key air route
Ugandan Trade Minister Daudi
Migereko has invited investors to venture into the Entebbe-Nairobi
air route to reduce transport costs.
‘If we get more investors, the rates would
be reduced. High transport costs by regional airlines frustrate
tourism and increase supervision costs for businessmen in the three
countries’, Migereko said during a meeting called for discussing
modalities to develop a Business Climate Index in East Africa.
“It costs $150 (sh0.26m) from Mombasa to
Nairobi but Entebbe to Nairobi costs $550 (sh0.97m), although being
the same distance. Why charge high rates between Entebbe and Nairobi’?
, he felt, and observed that Kenya Airways was abusing its monopoly
position in the region.
However, Kenya Airways’ country manager
Emmanuel Okware defended that the lowest fare on Entebbe-Nairobi
route was $270 (sh0.47m). He added that there is no way, the airlines
could afford rates lower than that.
(The New Vision, 17.05.05)
NEPAD/OECD Roundtable
shows the way
Some very significant conclusions
emerged from the NEPAD/OECD Investment Roundtable with the theme:
‘Making it Happen’, held in Entebbe between 25-27 June,
2005.
Emphasis was placed on allowing the private sector
access to projects endorsed by NEPAD to ensure these projects see
the light of day!
Internal savings was also an issue discussed at
length, as something African leaders have to encourage and set themselves
as an example. There was a strong need to encourage people for saving
their money in a domestic bank, and not in a foreign bank account
outside of Africa!
The concept of ‘Less Aid - Let's Trade’,
also received a lot of attention and evenly resounded among the
participants in the meeting.
The following statements were extracted from the
concluding remarks by Co-Chairs Mr Mathale, Director, NEPAD Secretariat
and Mr Akasaka, OECD Deputy Secretary-General:
‘Trade and investment is the surest solution
to growth and job creation. This was also stressed by the President
of Uganda in his address to the Roundtable’. ‘The need
to address obstacles for more active private sector participation
in infrastructure was the subject of particular attention by Roundtable
participants, and the discussion focused on regulatory, capacity
constraints and lack of adapted financing mechanisms’.
(The Foundation for the Development of Africa, 30.05.05)
