Trade Policy

Africa’s Position in a Deglobalizing World

Africa’s nearly 420 million youth embody the continent’s vast potential for economic and social development. However, one third of these youth are currently unemployed and raising economic growth is crucial for harnessing this demographic dividend . In the previous period of globalisation, Africa depended heavily on exports of commodity goods to the rest of the world to drive economic development, but this has not been sufficient to create the jobs needed to lift large parts of the continent out of poverty. In the era of “slowbalisation”, with global economic integration cooling, African countries are offered a challenge and opportunity to recalibrate their development strategies and to thrive in a changing world, mainly through regional integration and the implementation of the African Continental Free Trade Agreement (AfCFTA).

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The 2nd annual Number 43 business roundtable

The 2nd Annual Number 43. Business Roundtable was held in Swaziland on 21 June 2015. This Roundtable event forms part of the annual celebrations recognising the contribution made by the Number 43. Trelawney Park household in the fight against Apartheid. Given the recognition of cross-border support to this cause, regional integration forms the core theme of the Roundtable discussion. This year, the Roundtable welcomed the South African Reserve Bank Governor, Mr. Lesetja Kganyago, as the event’s “Chief Instigator”. The resulting discussion was robust and serves to highlight some of the key constraints and opportunities to regional integration in SADC.

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South Africa’s importance and reputation as an investor in Africa

The formation of the BRICS, Africa’s rising importance as a destination for foreign investment and the continent’s favourable growth prospects have ensured renewed focus on the continent, and South Africa is seen and marketed as a “gateway to Africa”. What is often missed however is the extent to which South African companies themselves have invested in the continent, and the positive light in which these companies are viewed by consumers in many host countries. A recent report by DNA Economics and TNS Surveys for NEDLAC’s Fund for Research into Industrial Development, Growth and Equity (Fridge) places the importance of South Africa’s outward FDI into context and assesses the attitude of host countries to South African investors.

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What Zimbabwe’s new constitution means for provincial leadership

From its Independence in 1980 until 2008, Zimbabwe was governed by the Lancaster House Constitution, a document that was hurriedly put together as part of the ceasefire agreement. Despite being amended 19 times the Constitution retained centralised power in the national government and the President. The President handpicked provincial governors and the Minister responsible for local government. These presidential appointees not only ran all local government structures but could also dissolve local government structures in the “interests of good governance and public administration”. The new Constitution accepts the principle of devolution, but fails to devolve any specific powers, leaving the definition of roles and responsibilities open to interpretation. Despite a constitutional shift in the right direction, in practical terms, it seems likely that there will be a continuation of the current situation in Zimbabwe, whereby political power remains centralized within the national government.

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Export diversification in South Africa

The National Industrial Policy Action Plans (IPAP) released in 2007, 2011, 2012 and 2013 serve to identify and develop the sectors that South Africa should focus on in achieving faster growth and employment. The choice of these sectors in the various IPAP reports is not based on any substantive analysis as to where South Africa’s export potential lies. The ‘product space’ is an easy to use and comprehend analytical instrument which could be used to fill this gap.This blog serves to illustrate how this technique works and what it reveals.

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Spreading the gains from regional financial sector reforms

In 2012, the SADC launched negotiations on the liberalisation of trade in services for six priority sectors, including banking and other financial services. It is expected that these negotiations shall be finalised within three years. In theory, the liberalisation of trade in banking services is expected to improve service quality as well as access to banking services. In practice, the experience of many Southern African countries does not always stand up to the theory.

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Increased financial openness in SADC – an invitation for trouble?

Recent and dramatic changes in global financial markets have had disastrous effects on some less developed countries in Africa. Although these countries may not have strong and direct financial sector linkages with the rest of the world, their dependency on a limited number of primary sector goods has exposed them to changes in world demand, resulting in a slowing of growth. There is some risk that a prolonged global slowdown might reverse the successes attained in overcoming the food and fuel crises of the 1990s and bring social and economic development to a halt. These challenges raise questions about the rationale (or at least the timing) of global and regional efforts to deepen economic integration.

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