African Union Summit in Niger: Historic Rendezvous!

Last update: 1st July 2019

The African Union Heads of State will hold an extraordinary Summit on the African Continental Free Trade Area (AfCFTA) on the 7th July 2019 in Niamey, Niger. The Summit will be dedicated to the launch of the operational phase of the AfCFTA as well as its operational instruments.

The extraordinary Summit will be held in the margins of the inaugural session of the Mid-Year Coordination Meeting of the African Union and the Regional Economic Communities (8th July) that replaces the previous mid-year AU Summit, as decided within the framework of the ongoing African Union reform.

The Executive Council of the AU (Ministers of Foreign Affairs) will have its ordinary session on the 4th & 5th July on the same occasion deliberate on important documents and reports of AU organs including most likely the 2020 budget of the Union the legal documents of the new African Union Development Agency (AUDA-NEPAD), the theme of the year 2020 among other things.

In this personal blog I am sharing an overview of the key items on the Agenda of these important gatherings, the outcome of which would be a big step toward the  implementation of the Agenda 2063, the Africa we want.

The Launch of the African Continental Free Trade Area: What Expectations?

The Treaty establishing the African Continental Free Trade Area aims to 1/ Create a single continental market for goods and services, with free movement of business persons and investments, therefore, pave the way for accelerating the establishment of a continental customs union, 2/ Expand intra-Africa trade through better harmonization and coordination of trade liberalization, facilitation regimes and instruments across the continent, 3/ Resolve the challenges of multiple and overlapping memberships and expedite the regional and continental integration processes , 4/Enhance competitiveness at the industry and enterprise level through exploiting opportunities for scale production, continental market access and better reallocation of resources in Africa.

The African Continental Free Trade Area then provides an opportunity to promote policies  and resources that could create conditions for harnessing Africa demographic dividend in the context of creating space for jobs, especially for the youth and economic diversification. This requires attention to expediting domestic capital formation and using capital market strategies to drive the creation and expansion of small and medium enterprises involving youth ownership.

If genuinely implemented, the AfCFTA will provide a framework to ease the cost of doing business within Africa. It will aggregate the very fragmented African market  but,… will the continent quickly address non-tariff barriers, such as infrastructure backlogs, border corruption, poor communication means etc? Above all I am also wondering if we have enough to trade among ourselves with this ambitious trade agreement while our economies are mostly alike and largely dominated by the exportation of raw material. To take full advantage of the AfCFTA African leaders should deliberately and aggressively invest in industrialization without waiting. An initial focus should be on agriculture and agro-industry development.

The Agreement establishing the African Continental Free Trade Agreement (AfCFTA) entered into force on 30th May 2019 for the 24 countries that ratified it. 52 of the 55 AU Member states signed the AfCFTA. Only Benin, Eritrea and Nigeria have not signed the Treaty. If fully ratified, the AfCFTA will open the largest free trade zone in the world with a collective GDP of over $3 trillion and more than 1.2 billion consumers. AfCFTA is expected to boost intra-Africa trade, which accounts roughly for 17% only of all the continent’s exports. The UN Economic Commission for Africa (UNECA) has estimated that intra-Africa trade would likely increase to 52.3 % by 2020 due to the AfCFTA.

The Extraordinary Summit

Hotel Niamey

Beside the launch of the operational phase of the AfCFTA, the AU Summit’s delegations to be hosted in the newly built Radisson Blu Hotel of Niamey are expected to launch the following operational instruments of the treaty.

  • Rules of Origin Portal
  • Tariff Concession Portals
  • Portal on Monitoring and Elimination of Non-Tariff Barriers
  • Digital Payments and Clearing System
  • African Trade Observatory Dashboard

The Niamey Summit will surely be one of the most attended  AU Summit by Heads of State and other personalities in recent time.  Special guests will likely include the Secretary General of the United Nations António Guterres, the Director General of the World Trade Organization, Roberto Azevêdo, the Secretary General of the United Nations Conference on Trade and Development Dr.  Mukhisa Kituyi, the President and Chairman of the Board of Directors of the African Export–Import Bank (AFREXIMBANK) Professor  Benedict Okey Oramah, the Executive Director of International Trade Center Dr. Arancha Gonzalez, the European Commissioner for International Cooperation and Development Neven Mimica among others.

The Summit will also consider and approve a set of other decisions coming from the Executive Council as part of the reform of the African Union.

On the Agenda of the Executive Council

The Ministers of Foreign Affairs will most likely discuss and eventually make decisions on the following:

  • The legal instruments of the new African Union Development Agency – NEPAD including the statutes and the rules of procedures of its governing structures
  • The new statutes of the African Peer Review Mechanism (APRM)
  • AU budget for 2020: the current draft budget is around 647 Million USD, more than 60% of which will be paid by external partners
  • The Theme of the year 2020. The current proposal is:“Silencing the Guns: Creating Conducive Conditions for Africa’s Development”
  • The Implementation of Agenda 2063
  • The African Court on Human and People’s Rights
  • The African Commission on Human and People’s Rights
  • The Challenges and Ratification/Accession and Implementation of the OAU/AU Treaties and decisions

In addition the Council will consider the agenda, working documents and expected outcomes of the Mid-Year Coordination Meeting of the African Union and the Regional Economic Communities.

Discussions and decisions on the new departmental structure of the AU Commission in the framework of the African Union reform will likely be differed  to the February 2020 Summit.

Several side events are also on the Summit agenda.

The Mid-Year Coordination Meeting of the African Union and the Regional Economic Communities: The way forward toward Effectiveness and Efficiency?

au-summit_banners_july2019_website

From now on, according to a decision of the Assembly of the Union, there will be only one ordinary AU Summit per year instead of the two Summits previously held. The Mid-year Summit has now become a Coordination Meeting with the Regional Economic Communities (RECS). The Permanent Representatives Committee (Ambassadors) and the Executive Council of the Union will normally convene as before, prior to the Coordination Meeting. In Niamey, the rules of procedure of the coordination meeting will be considered and eventually adopted. The Mid-Year Coordination Meeting will normally be the highest committee for the African Union and RECs to align their work and coordinate the implementation of the continental integration agenda. The rules of procedures to be discussed in Niamey will define the composition of the gathering, criteria for participation, the running of its business, powers and decision making mechanisms. These policies would have to be adopted ultimately by the Assembly of the Union.

Regional Economic Communities (RECs) are regional groupings of African States each lead by a Head of State or Government on a rotational basis.  Currently the African Union recognizes 8 RECs from the 5 geographical regions of the continent. They are seen as the building blocks of the African Union in its economic integration process. The 8 RECs are: AMUCEN-SADCOMESAEACECCASECOWASIGAD and SADC.

The RECs work more and more closely with the African Union and are expected to serve their member States with the implementation of the regional integration agenda. The RECs were formed on either historical, political or economic basis. Their members are generally of more than one regional economic community and they operate at different levels of capacity and efficiency. You can read more about the RECs here.

The launch of the mid-year coordination meeting between the AU and the RECs carries the hope to deal with the cumbersome issue of overlap, duplication and sometime competition between the African Union and the RECs, to finally insure complementarity, subsidiarity and to use the comparative advantages  of each of the regional bodies vis a vis the African Union. It will also create an important platform to track the implementation of the African Union decisions at country level; more than 80% of which remain in the shelves untouched according to various reports.

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How to Finance Africa Sustainable Development Post 2015?

Public Debate – Towards the Third Financing for Development Conference in July 2015 – Tuesday 19 May 2015 from 14:00  @ African Union Commission Headquarter

My Opening Remarks

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Excellency, Ladies and Gentlemen, all protocol observed,

Thank you for joining this public debate co-hosted by the African Union Commission’s Department for Economic Affairs and Oxfam Liaison Office to the African Union

The Third International Conference on Financing for Development (FfD) will take place on 13-16 July 2015, in Addis Ababa, Ethiopia.

We expected the conference to be held at the highest possible political level, including Heads of State or Government, relevant ministers – ministers for finance, foreign affairs and development cooperation – and other special representatives.

This conference will set the scene for governments’ efforts to mobilize development finance to achieve the Sustainable Development Goals (SDGs) set for the period 2016 – 2030.

Decisions of the  FfD must be bold, visionary, and lead to transformative change if today we are to create universal equitable and sustainable prosperity within planetary boundaries, and fulfil international human rights obligations for future generations.

FFD must build on the foundations of the previous FfD in 2002 in Mexico which is “to eradicate poverty, achieve sustained economic growth and promote sustainable development as we advance to a fully inclusive and equitable global economic system.”

The Third FFD Meeting will be then crucial to ending extreme poverty and tackling inequality everywhere. The conference will also lay the foundation for an agreement in September in New York on the new sustainable development goals, and for a binding climate-change agreement in December in Paris

The Financing for Development process come at a critical time, and must deliver on a number of issues for other crucial global agreements to bear fruit.

This conference will be the 3rd to be organized. The last one happened in Monterrey in Mexico in 2002.

The Addis Ababa event will have a different dimension compare to the previous FFD in Monterrey

  • Monterrey took place after agreement had been reached on the MDGs, while Addis will happen before formal the adoptions of the Sustainable Development Goals
  • Monterrey was focused on a government-to-government agreement but a larger number of stakeholders will be involved in Addis Ababa, including businesses, academics, civil society, scientists, and local authorities.

The conference should unlock finance from many different sources, including but not exclusively aid, to implement the upcoming Sustainable Development Goals.

Addis Ababa meeting will take place in the context of a slow global growth, in a world being devastated by conflicts and facing serious natural disasters and climate issues.

Agreements should have significant consequences for successful implementation of the SDGs at national, regional and global level.

Recommendations should be clearly actionable, with next steps in implementation that are easy to understand, easy to confirm and easy to tract.

There are other previous commitments already made which have not yet been met. There is a need for renewed efforts to meet these commitments; such commitments include meeting the target to provide 0.7% of Gross National Income in Official Development Assistance (ODA).

Given the high expectations placed on the FFD3 and the need to deliver tangible results, it is expected that the Addis Ababa Agreement mobilize international action around specific initiatives focusing on education, health, smallholder agriculture and nutrition, infrastructure etc.

The global scene and challenges have changed since the setting up of the MDGs.

We now have more scientific knowledge about climate change, rapidly growing tax evasion, unsustainable debt burdens, and the impact of trade agreements on domestic resource mobilization in developing countries.

Least Developed Countries (LDCs) have faced many of the greatest challenges in making progress toward the MDGs.

With limited trade and financial links to the rest of the world, LDCs have not gained substantial benefits from globalization, yet they are bearing many of the costs of global progress, such as climate change.

Since the FfD3 process began, lines seem to be drawn, between the global South and the global North.

The Group of 77 and China (G77) the African Group, the Least Developed Countries, Brazil, India, and other states and blocs consistently defend the right to development.

Developed countries including the European Union, the United Kingdom, the United States, Japan and others assert that all countries have to take responsibility.

FFD must result in finding resources for the upcoming SDGs: This must include both financial resources, non-financial measures including technology transfer and capacity building, as well as international systemic issues of finance, trade, tax etc.

Ladies and Gentlemen,

Radical change is needed in the development finance architecture to make it fair and just…

For every $1 dollar developing countries gain from development partners, they lose around $2 dollars (especially in illicit financial flows and debt repayments).

Aid figures are minimized by outflows from corporate tax dodging and illicit flows, lending to developed countries, and profits to private investors.

To rebalance the terms of international financing, to ensure developing countries get their just and fair share, courageous decisions must be taken in Addis Ababa.

As a priority, governments must create a system that ensures multinational companies pay tax where the economic activity takes place and limit discretionary tax incentives so that the hundreds of billions in potential tax revenue credit governments’ budgets.  

 

A Few Questions to Ourselves:

How are we going to deal with Domestic Public Finance?

Are we seeing it as Primary source of development, or complement to aid?

How do we mobilize it, How do we manage it properly?

How do we ensure accountability and transparency on the use of our national resources in order to finance our development?

Who has the responsibility to track and stop Illicit Financial Flows?

What about those assets illegally taken from Africa mostly through practices of tax evasion, trade and services mispricing as well as transfer pricing abuses by transnational corporations?

How do we deal with the lost of  $50-$60 billion a year in illicit financial outflows from Africa. An amount that is more or less equal to the total foreign direct investment (FDI) and more than the total Development Assistance that the continent receives annually?

How do we respond to Domestic and International Private Business and Finance, being promoted by western partners?

Are the current rules of International Trade favourable for Sustainable Development?

Ladies and Gentlemen, these are some of the questions on the table…

Make sure your opinion and your voice are heard in this debate.

The outcome of this discussion will be compiled in a report to be widely disseminated.