Video guest: Josephine Mwangi

May 2018
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EDITO
Friday, 25 May 2018
South Africa is the EU's largest trading partner in Sub-Saharan Africa. Following the provisional application of the Trade, Development and Cooperation Agreement (TDCA) in January 2000, South African exports to the EU went up by 46%. The improvement of the composition of EU-South Africa trade is also encouraging: while EU exports to South Africa comprise a larger share of capital goods, South Africa is gradually moving from mainly commodity-based products to a more diversified structure of exports including more manufactured products. That is the high road to development.The political and regional backdrop to the relationship is changing fast. The EU has grown by ten new members and significantly increased its global political and trading reach. The same regional perspective applies for the Southern African region. The EU, African Union (AU) and African, Carribean and Pacific countries (ACP) have also jointly embarked on root and branch reviews of their relations, though the launch of Economic Partnership Agreement (EPA) negotiations with ACP sub-regional groupings. In Southern Africa these negotiations are with seven members of SADC (Botswana, Lesotho, Namibia, Swaziland, Tanzania, Mozambique and Angola). It is important to have greater involvement of South Africa in the EPA SADC negotiations. South Africa is an observer within these negotiations, and the more it is involved, the more we will have economic coherence: between trade arrangements within the region, but also between the region and the EU.
Read more on the visit of Peter Mandelson, EU Trade Commissioner.
Under the European Union-African Caribbean and Pacific States Partnership Agreement (Cotonou Agreement), the European Investment Bank (EIB)is providing up to EUR 1.7 billion of its own resources and a further EUR 2 billion that it manages under the Investment Facility (IF) between 2003-2008. The Investment Facility makes available long-term capital in the form of various risk-sharing instruments focused on the financing of private sector operations and public sector infrastructure essential for economic growth and the development of private sector investment. In specific cases, notably projects with an important environmental and/or social component, loans may be granted on concessional terms Negotiations on the revision of the Cotonou Agreement were concluded last June. Under the revision, projects located in Heavily Indebted Poor Countries (HIPC) and in post-natural disaster areas also become eligible for concessional financing. Negotiations on the Cotonou financial endowment for the next six years are ongoing.
The EIB’s mandate under the Cotonou Agreement The central objective of the Cotonou Agreement is the reduction and ultimate eradication of poverty. The IF contributes to this by financing operations fostering economic growth and the integration of the ACP economies into the world economy. The Investment Facility • The focus is on developing the private sector, seen as the main engine of economic growth, and commercially managed public infrastructure. Viable revenue-generating projects in all economic sectors are eligible. Over the last year, operations have concentrated on the financial sector in the ACP countries as the most effective way to reach SMEs (small and medium-sized enterprises), and on infrastructure projects. • The IF is: o Managed along commercial lines with the aim of being financially sustainable o A revolving fund, with re-flows re-invested in new projects, so ensuring the long-term availability of resources • Own resource loans continue to be available alongside financing from the IF on a best efforts basis.
2005 highlights Financing provided by the EIB in 2005 in the ACP totalled EUR 351 million from the Investment Facility (+EUR 15m remaining from Lomé IV) and EUR 151 million from own resources. Including the Republic of South Africa (EUR 145 million), the total came to EUR 682 million, some 26% more than in 2004. Cumulative financing under the IF, since 2003, amounts to EUR 820 million (signatures), 40% of the EUR 2 037 million foreseen under the current first financial protocol of the Cotonou mandate. 2005 saw the Nairobi, Dakar and Pretoria (Thswane) the EIB’s regional representations become fully operational. Through these offices, project identification will become more effective. However, the inability – for political reasons – to operate in some of the countries in which activity has traditionally been extensive4, and difficult economic conditions in many ACPs, continued to influence EIB and IF activities in 2005. In 2005, a significant effort was made to support the microfinance sector and to establish a development impact assessment framework for IF projects. In November, the EIB held a conference for the International Financing Institutions’ private equity working party to discuss development impact assessment indicators for development funds in which the IFIs invest. Of the EUR 682 million in signatures in the ACP and South Africa, close to 80% was provided to ACP countries, with EUR 145 million going to investment in South Africa in the water and municipal infrastructure sectors.
CAP reform: Commission proposes to simplify agricultural state aid rules and facilitate crisis support
Quicker crisis support for farmers and a simplified administration of agricultural state aids - this is the objective of a draft Commission regulation adopted today. The Commission proposes to include compensation for bad weather and animal and plant diseases in the present exemption regulation for state aid in the agriculture sector. This would greatly speed up the implementation of state aid in such situations of crisis for farmers. At the same time, the Commission proposes to significantly simplify the present regulation and encourage better risk management. From 2010 onwards, bad weather aid will only be exempted if the farmer has also taken out insurance against such risk; drought compensation will require implementation of the water framework directive, requiring full recovery of the costs of water services provided to agriculture. Finally, the regulation proposes an innovative system of “calls for interest” for investment aid. Member States shall be obliged to accept projects with lower aid intensities first. Only the remaining budget may be attributed to projects for which higher support has been asked for. This should lead to a better allocation of public support, ideally creating more jobs and growth in rural areas. Following consultation of Member States and stakeholders, the Commission plans to implement this regulation from January 2007.
Today the European Commission published a report on "Prospects for agricultural markets and income 2005-2012". This report, which does not take into account the recent decisions adopted in the framework of the WTO negotiations in Hong Kong in December 2005 and the conclusions of the European Council from December 2005 on the 2007-2013 financial perspectives, shows that the medium-term perspectives for the EU cereals, meat and dairy markets appear relatively favourable. The build-up of high levels of stock in 2004 is expected to continue to leave the cereal markets in a fragile situation over the short-term, with the risk of regional imbalance in the landlocked new Member States of central Europe. In the medium-term, there should be a gradual fall in stock levels supported by further, though moderate demand increases on the domestic market, more favourable conditions on world markets and the better integration of new Member States into the single market. EU meat markets have returned to a more normal situation after the extreme market conditions of the past few years. The current situation in the beef market - where consumption is higher than domestic production - is expected to persist over the 2005-2012 period with a further increase in EU net imports. Pig and poultry production and consumption are expected to keep growing over the medium term, though at a lower pace than in the 1990s. It should be acknowledged that these relatively positive projections for the meat markets do not take into account any effects of avian influenza. The EU dairy sector is foreseen to display a decline in the production of butter and SMP over the medium term as more milk is used for the production of cheese and other high value-added dairy products. These medium-term projections should lead to a 12.8 % growth in EU-25 agricultural income between 2004 and 2012 in real terms and per labour unit (6 % in the old member States and a steady 50.3 % rise for the new Member States -i.e. +182 % against 2003 before enlargement). If the outlook for EU agricultural markets and income over the next seven years appears relatively favourable, it clearly remains subject to some important uncertainties, in particular the outcome of the Doha Development Round of trade negotiations and the risks linked to animal disease such as Avian Influenza. These perspectives are also provided on a regional basis, together with a regional analysis of alternative decoupling systems.
Monday, 13 February 2006
The European Union has said it was following closely the bird flu outbreak in northern Nigeria and was readying millions of euros of aid for Nigeria to help fight the spread of the disease. EU spokesman Philip Tod said EU experts "are remaining in close contact" with officials in Nigeria, and with UN agencies, like the Food and Agriculture Organisation, which are helping fight the outbreak there. "The European Commission is concerned about the outbreaks in northern Nigeria," he said, adding the EU was in talks with the 76-nation African, Caribbean and Pacific group on an EU pledge of 30 million euros it was giving to them to help prevent the spread of the disease. "That aid is yet to be agreed by the ACP countries. We certainly expect Nigeria to benefit from part of these funds, to help them in their fight of this disease," said Tod. Nigerian poultry farmers have called for more compensation for those whose flocks have been hit by the bird flu, the first known outbreak in Africa. The deadly H5N1 strain of bird flu was confirmed on Wednesday and Thursday in three of Nigeria's 36 states, all in the north of Africa's most populous nation. The disease has killed some 100,000 Nigerian birds so far.