International and Regional Trade Promotion through Research Analysis and Awareness

Impact of a Merger Assessment False Positives and Negatives

2026-07-18T10:16:45.404-07:00

A merger assessment regime is regulatory tool used by competition authorities to filter mergers with anti-competitive effects in order to maintain competitive markets. However, predicting the future economic landscape is inherently prone to uncertainties and diagnostic errors (Devlin, 2012). Competition authorities are particularly faced with a challenge of ensuring a delicate balance between two distinct regulatory missteps: False positives (Type I errors) and False Negatives (Type II errors) (Manne, 2020) which carry profound economic consequences, albeit with different impact manifestations across the marketplace.

The Cost of False Positives (Type I Errors)

A false positive occurs when a competition authority erroneously intervenes against or blocks a merger that is actually pro-competitive or economically benign (Manne, 2020). Such an error can permanently suppress economic efficiencies and synergies of a merger, including but not limited to:

Chilling Innovation: When a pro-competitive merger is blocked, the market loses out on structural optimization, economies of scale, and enhanced research and development (R&D) capabilities.

The "Shadow of the Law": The chilling effect extends far beyond the affected merger. Over-enforcement creates regulatory friction and causes future market participants to avoid beneficial consolidations out of fear of entering into a protracted, expensive but unpredictable litigation (Khan & Davies, 2009).

Historically, competition authorities have relied on the antitrust doctrine to guard against false positives. They have operated on the assumption that market mechanisms may naturally self-correct against monopolies, but can never resurrect a beneficial merger that was erroneously killed (Devlin, 2012).

The Peril of False Negatives (Type II Errors)

Conversely, a false negative occurs when a authority erroneously approves a merger with anti-competitive effects (Salop, 2016) such as the following:

Entrenched Monopolies: If an agency clears a transaction believing it will yield consumer benefits, but it instead creates unchecked market dominance, the immediate result is consumer harm through inflated prices, diminished product quality, and reduced consumer choice (Röller & De La Mano, 2006).

Erosion of Competitive Dynamics: In modern digital or high-barrier industries, the classic assumption that a market will "self-correct" against a monopoly often fails. Dominant firms can use their consolidated power to permanently box out emerging rivals (Manne, 2020).

A notable real-world example of the weakness in remedy-based clearances is seen when behavioral or structural remedies fail, such as the structural divestitures in the Albertsons/Safeway merger, where the buyer of the divested stores quickly went bankrupt, effectively reducing local competition despite the agency's intended safeguards (Salop, 2016).

Impact on Regional Integration in Developing Countries

Merger assessment errors have overarching impact on developing economies and the stakes get amplified under a regional integration framework (such as COMESA, ECOWAS or AFCFTA). A single regulatory miscalculation ripples across multiple borders with regional false positives and false negatives:

Regional False Positives: When a regional authority erroneously blocks a beneficial merger, it can severely fragments and deter deepening of the integration. Developing markets often require cross-border consolidation to build the critical mass and regional champions are key to achieving regional economies of scale. A regional false positive isolates domestic markets, denying economic bloc the chance to integrate supply chains and attain cross-border efficiencies for regional resilience.

Regional False Negatives: Conversely, an erroneous clearance by a regional authority can establish a cross-border monopoly. If a dominant multinational or state-backed firm swallows up nascent local competitors across a trade bloc, it can permanently heighten entry barriers for regional entrepreneurs. This leaves weaker partner states vulnerable to regional price-gouging and economic exploitation.

Strategic Considerations for Improvement

To minimize these errors under constrained resources, developing competition authorities can adopt targeted structural reforms:

Introduce Dual-Track Thresholds: Regional authorities should try to pronged approach of splitting the review processes. They should identify small cross-border mergers which can be fast-tracked with minimal clearances mistakes yo avoid Type I errors. This also allows enforcement resources to be fiercely concentrated on mega-mergers that risk systemic market foreclosure (Type II errors).

Harmonize Regional Substantive Tests: Regional authorities should align the assessment regime including the definition frameworks and merger-notification guidelines across with national regimes and the trade dynamics of their respective economic blocs to minimize legal friction, disincentive forum shopping and reduce possibilities for false positives.

Deploy Effective Cross-Border Information Gathering and Sharing: Regional authorities should establish formal protocols to gather and share key market data and prevailing economic conditions across the economic bloc. Pooling localized market intelligence directly rectifies the information asymmetries that breed diagnostic errors.

Retool and employ competent staff: Merger Assessment is skill based discipline and therefore requires expertise and competencies. The regional should have in place enough competent and adequately facilitated staff with the necessary tools to conduct effective assessments.

Ultimately, neither error can be completely eliminated. Modern competition policy must constantly calibrate its evidentiary thresholds to minimize the collective total cost of both chilling dynamic market evolution and allowing anti-competitive consolidation to slip through the cracks.

References

Devlin, A. (2012). Antitrust error. William & Mary Law Review, 54(1), 75–132.

Khan, R. A., & Davies, G. (2009). Merger control and the rule of law. Erasmus Law Review, 2(1), 25–58. https://doi.org/10.5553/elr221026712009002001003

Manne, G. (2020). Error costs in digital markets. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3733662

Röller, L. H., & De La Mano, M. (2006). The impact of the new substantive test in European merger control. European Competition Journal, 2(1), 9–28. https://doi.org/10.5235/ecj.v2n1.9

Salop, S. C. (2016). Modifying merger consent decrees to improve merger enforcement policy. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2768143

Gal, M. S. (2003). Competition policy for small market economies. Harvard University Press.

Fox, E. M. (2012). Competition, development, and regional integration: In search of a competition law fit for developing countries. Law & Economics Research Paper Series, New York University School of Law.

The Impact of Dark Patterns on Consumer Trust in Africa

2026-07-15T00:16:52.819-07:00

With the advent of digital markets, Dark Patterns which are likely to undermine trust of the consumer trust in digital platforms. Dark Patterns exploit the cognitive biases to steer users toward choices favouring the platform over the consumer. The OECD's 2022 report identifies recurring tactics: false urgency countdowns, pre-selected add-ons, hidden fees disclosed only at checkout, confirm-shaming, and "roach motel" subscriptions that are easy to enter but deliberately hard to exit.

Consumer trust is the expectation that a seller will act honestly and deliver as represented, without the buyer needing to verify every claim. In digital markets, where consumers cannot physically inspect goods or counterparties, trust substitutes for that missing verification; it is what enables the consumer to enter card details, accept a subscription, or return to a platform. Trust is therefore not incidental to e-commerce, it is the transactional base on which growth, repeat custom, and cross-border digital trade depends.

Dark Patterns however, have the potential to erode this trust directly. Once a consumer discovers they were nudged into an unwanted charge or an inescapable subscription, the perceived fairness of the transaction collapses, producing frustration, regret, and declining confidence not only in that seller but in online commerce generally. The 2024 OECD-ICPEN review found over 76% of websites examined used at least one dark pattern, with 67% using multiple tactics , a clear evidence of how pervasive these designs have become.

Africa's exposure is rising alongside its digital growth with various countries e-commerce revenue projected to reach $112 billion by 2029, driven by a surge in mobile money and expanding digital markets. As AfCFTA advances digital trade, member states should codify dark patterns as unfair practices and harmonise disclosure standards, before eroded trust undermines the continent's digital trade ambitions.

IMPLICATIONS OF THE GLOBALIZING DIGITAL RETAILING ON COMPETITION AND CONSUMER PROTECTION IN COMESA COUNTRIES

2022-10-25T00:21:00.002-07:00

ABSTRACT

IMPLICATIONS OF THE GLOBALIZING DIGITAL RETAILING ON COMPETITION AND CONSUMER PROTECTION IN COMESA COUNTRIES

Digital retailing has become one of the major factors contributing to globalization of markets with a substantial impact on trade and consumer welfare at the national, regional as well as multilateral levels. However, digital retail base in developing countries remains relatively low due to competitiveness challenges including weak institutional frameworks, inadequate supportive infrastructure, limited market size and skills gap, among others which make it difficult for an individual developing country to apply policies to effectively address competition and consumer protection related challenges. As a result, some of the developing countries may find it difficult to apply competition and consumer protection policies to fully utilize digital retail potential while ensuring consumer welfare in the market. The challenges are exacerbated by practices in foreign territories, where developing countries have no jurisdiction, but which have an impact on them due to cross border effects. The study therefore sought to identify specific policy options and implementation approaches countries in the Common Market for Eastern and Southern Africa (COMESA) can adopt to address the multi-jurisdictional limitations of digital retail to promote effective competition and ensure consumer welfare while harnessing the potential of ecommerce in the region.

Legal regime and regulatory frameworks to support implementation of AfCFTA and improve compliance by the Member States

2020-07-20T00:13:00.003-07:00

Efficient supranational institutions will be required to coordinate implementation and deepening of the African Continental Free Trade Area (AfCFTA). The AfCFTA will need supranational institution similar to those at the national level and probably with much higher authority to monitor and enforce implementation of the AfCFTA decisions in the member states and at the regional level. To achieve this, Member States need to cede some sovereign powers to the continental authorities and allow their national bodies to operate on the principal of subsidiarity. In other words, the ultimate power has to be at the continental level as operations and enforcement are achieved through the national bodies.

The AfCFTA should avoid following wholesomely the footsteps of the existing economic blocs in Africa. A closer look at these blocs reveals that only a few supranational authorities have been established and even then they are not empowered with enough authority to monitor and enforce implementation of the decisions. In most of the economic blocs in Africa, the visible and operational supranational institutions are mostly the Secretariats. This is noticeable with economic blocs such as EAC, COMESA, SADC, ECOWAS and IGAD, among others. Although the Secretariats are important in the integration process, their main function has been mainly to coordinate the blocs in the integration process. Secretariat have been limited to preparation and coordination of meetings, following-up and tracking progress on implementation of the decisions and updating the responsible parties. In most cases and as reflected in article 13 of the agreement establishing the AfCFTA, Secretariats have limited powers to enforce implementation and reprimand member states for noncompliance.

However, supranational institutions are meant to break the barriers of sovereignty and increase openness in all economic forms. Thus they need adequate mandates and authority to act independently on measures of Member States that are inconsistent with the Treaty. Take an example of article 116 of the Treaty on the functioning of the European Union (TFEU), the Commission is mandated to monitor and determine consistence of the measures in Member States, determine whether they distort the conditions of competition in the internal market and consult the Member States concerned to address the distortion. Where consultation fails, the European, Parliament and the Council, are mandated to issue the necessary directives to address the distortion. Articles 28 and 30 of the TFEU prohibit imposition of customs duties or charges with equivalent effect on goods originating from a member state. In article 258 the Commission is mandated to assess whether a Member State is fulfilling an obligation under the Treaties, if it is not conforming, the Commission delivers a reasoned opinion on the matter after giving the State concerned the opportunity to submit its observations. Where the State concerned does not comply with the opinion within the period laid down, the Commission can forward the matter before the Court of Justice of the European Union.

It is clear from the example above that EU member states intentionally empowered the Commission to be an authority on matters of enforcing compliance. African Union can borrow a leaf to establish institutions with such powers. Member States cannot be left alone to monitor and compel themselves to comply with the Agreement. They are competitors in the market with domestic, sovereign and political interests to serve. This brings in a conflict of interest which has to be checked by an independent party.

For example, in addition to the Secretariat and the Dispute Settlement Authority that have already been established under articles 13 and 20 of the Agreement establishing the AfCFTA, more authorities will be needed to ensure effective coordination, monitoring and enforcement of Agreement. Other supranational or continental authorities required Include

(a) the Surveillance and Monitoring Authority to monitor the market, assess the application of the AfCFTA Agreement by the Member States and ensure fulfillment by the AfCFTA Member States of their obligations. The Authority should be given powers and mandate similar to those of the EU Commission or the Surveillance Authority of the European Economic Area (EEA). Where a new authority is not possible the Secretariat can be empowered to perform this function.

The AfCFTA Protocol on rules and procedures on settlement of disputes as currently designed will not be sufficient to compel Compliance by the Member States. Articles 4 to 10 on nondiscrimination of the AfCFTA Protocol on trade in goods or article 4 of the Protocol on trade in services will require close monitoring and surveillance. Member States tend to apply complex measures to evade compliance and takes a dedicated market surveillance and technical assessment to ascertain existence of a noncompliance measure by a Member State. Leaving it to the traders to identify such measures and then report to their countries to raise the matter may not be the best way to go about. Moreover, Member States have other considerations before raising any complaint against a trading partner. A Member State may choose not to complain or report an ongoing non-tariff barrier in fear of trade retaliation or in other spheres. It is easier to secure compliance where an independent body is responsible for picking up inconsistent measures and following the laid up procedure impose a remedy

(b) Competition Commission to implement decisions aimed at maintaining fair competition within the AfCFTA by monitoring and enforcing measures on anti-competitive conducts by companies that would damage the interests and erode the benefits of the FTA. The powers and mandates should be aligned with existing regional competition commissions under COMESA, EAC, ECOWAS and say with similar arrangements to the EU and EEA.

(c) Court of Justice to interpret the AfCFTA Agreement and related decision to make sure it is applied the same way in all Member States, and to settle legal disputes between national governments and AfCFTA institutions. The powers and mandates should be aligned with national courts and the existing regional Courts of Justice under COMESA, EAC, and ECOWAS, among others

(d) System of standards development, accreditation and surveillance on application and compliance. Standardization plays a central role in the proper functioning of the market. Harmonized AfCFTA standards will help to ensure free movement of goods within the internal market and allow enterprises to become more competitive. Harmonization helps producers to produce with one standard for all the AfCFTA market. However monitoring and enforcing compliance on standards should be lifted to continent level to avoid member states using this area to impose technical barriers to trade.

(e) The Pan African Parliament will require supranational legislative, supervisory or budgetary powers to promote effective transparency, accountability in member states and strength cooperation under the AfCFTA.

The protocols establishing the above institutions must have clear sanctions and execution criteria in cases where there is noncompliance by the Member State or the Authority itself. The protocols must have supranational jurisdiction over the national laws.

Lastly, one important cross cutting element that must be ensured is the funding of supranational institutions. They have to be properly facilitated to enable them perform their work effectively. Lack of funding will render the supranational institutions ineffective and dependent on donor funding from development partners whose interest may not be aligned with the objectives of AfCFTA.

Regional Integration presents advantages to a landlocked country

2020-01-07T05:27:00.002-08:00

For years it has been believed that countless ries needs access to the see in order for them to participate effectively in international trade. It is believed that transport costs would hinder countries to cost export to the markets. This idea was put in the forward because the assumption was that international market means western markets.

Regional markets were not considered to be potential markets for regional trade. All governments in Africa bought into this misnomer. They followed suit of the plan of the colonists to link Africa to Europe through railway lines and roads lead to the coast. Even a country with 5 countries to the cost would still strive to access coast without ever targeting to trade with the same countries. The countries would only roads linking to the coast but otherwise they were not interconnected on all the geographical coonners

Understanding your notes on international trade or any other topic

2019-09-08T23:22:00.002-07:00

Many times students spend a lot of time revising the notes but at times the results from the exams do not reveal the efforts. Consider a topic on why countries engage in international trade, a student will revise this topic for five times or so prior to the exams but strangely the results will not reflect the efforts of the students.

So what goes wrong? the problem is in the way students read and revise their notes or textbooks. When revising in preparation for an exam, say on international trade, one cannot read is if its a news paper. Human beings have a short, medium and long term memories. These affect the way we recall and respond to questions in an exam. A short term memory last between a second to say two to three days. After that a person may not recall anything about the event or the occurrence. For example the memory of the mosquito hoovering on your head may last for two seconds. A medium term memory may last for a week and up to a few months but it may not be easily recalled after that period. For example the name of the person you met once and for a very short encounter, may be recalled at least in a few months but after a year, it will be difficult unless that person had a subsequent impact or role in your life.. The long term memory lasts for years and at times forever in ones mind. For example the day of graduation or a weeding. the first day a new school or first sexual encounter will be recalled as if it happen yesterday, even after 30 years.

So what is the magic? the trick is in the way we process what we read. We do not process the information to final a conclusion so as to understand it fully and be able to remember it vividly whenever we are required to do so. Information has to be rehearsed o the point the where it be easily stored and retrieved from the long term memory. The process of rehearsing help one to put information into context and to be able to understand it from a real life perspective. This involves building of scenarios different from the way information has been packaged but pointing to the same conclusion. For example, when the topic is "International Trade" the reader is expected to first under the meaning of topic even before proceeding to the body. The reader should be begin by asking and answering questions such as what is international?, what is trade? what is international trade? Is their another form trade that is not international, what is the difference between the other form of trade and international trade?. This approach should be done over and ever for each subtopic.

Answering these questions before reading the body makes one gauge the existing level of knowledge on the matter. The reader should then read the body in the same manner of reasoning while ensuring that each word or sentence is understood in its true meaning and context. Real life scenarios must be drawn to ensure that the issues are understood in practical circumstances. It is known that international trade is the trade between two or more nations. If taken literally it could mean that trade occurs only when two countries are trading which of of course will be wrong because the country as a country does not trade but its Government or people do. However as long as there is trade across borders then international trade has occurred. Trade manifests in form of goods and people crossing the border and exchange of goods for a price. So the reader must visual these to comprehend the concept.

The reader should ensure to track and look out for answers to the questions drawn and compare with the original answers that were made before reading. Any incorrect answers made at the beginning are a sign of low levels of appreciation or understanding of the topic which should improve as one reads. This process must be repeated every time the reader comes back to the same topic and its sub topics.

The First Ever U.S-Africa Summit: A Chance to Improve U.S-Africa Trade and Investment Relations

2014-03-26T02:46:00.000-07:00

An opportunity is presenting itself to improve U.S-Africa trade and investment relations. President of the United States, H.E Barack Obama is scheduled to host the first ever U.S.-Africa Summit in Washington, DC on August 5 and 6, 2014. African leaders will therefore have an opportunity to identify and present their ideas to President Obama on what they believe should be done to improve to the U.S-Africa trade and investment relations.

Africa is being seen as one of the world’s most dynamic and fastest-growing regions. According to the 2014 projections released by the Economist Intelligence Unit, four out of ten fast growing countries of the world are in Africa. These include Sierra Leone (11.2%), Libya (8.8%), Eritrea (8.0) and Zambia (7.9). Actually, Africa's growth is superseding the rates in Asia. The African Development Bank has projected that by 2030 much of Africa will graduate into middle class economies with the majority attaining consumer spending level of $2.2 trillion. These projections clearly show that the next lead destination continent for foreign direct investment will be Africa.

It is not surprising therefore that the United States is hosting a U.S-Africa Summit which is expected to focus on trade and investment relations between the two parties. The Summit is also expected to discuss America’s involvement in ensuring Africa’s security and promoting democratic principles

The AGOA has not yet improved the US-Africa Trade and Investment Relations

African leaders however, need to take advantage of this first ever U-S-Africa Summit and use it to reverse the trade and investment trends which hitherto have been unfavorable to Africa. The U.S provides to Sub Saharan Africa duty free quota free market access to the America market under the AGOA arrangement. The objective of the AGOA is to enable Sub Saharan countries to integrate into global economy as competitive and meaningful trade and investment players. However, it does not seem that this noble objective is about to be achieved, even when AGOA has been in existence for over 13 years.

Data available from United States International Trade Commission (USITC) shows that over 32% of the exports to the US under the AGOA are contributed to by Nigeria. South Africa and Angola each contribute about 24% of the total exports from Sub Saharan Africa. However, all LDCs in Sub Saharan Africa are contributing less than 1% to the exports under the AGOA.

The above situation reveals that the objective of the AGOA has not been achieved. In spite of the dismal performance under the AGOA, Africa continues to import massively from the U.S a situation that is worsening the trade imbalance between the two parties and more specifically with those Africa countries whose export base does include minerals. It should be noted that oil and petroleum exports account for about 84% of the total exports under the AGOA. Apparel and textiles which supposedly are the mainstay of the AGOA, contribute about 17% of the total exports excluding oil and petroleum related exports.

Statistics can at times be misleading; the USITIC data shows that in 2013 the U.S recorded a trade imbalance with Africa to the tune of $15,286.2 million. This ordinarily implies that the U.S is importing more from Africa than it exports to the continent. But a quick look at the data reveals that a few of the African countries are actually benefiting from this situation. These are mineral reach countries i.e. Nigeria-Oil, Angola-Diamond and South Africa-Gold. These are the main countries that have a trade balance with the U.S led by Angola which recorded $7,294.90 million in 2013 and flowed by Nigeria at $5,249.4 million. Actually Angola and Nigeria alone contribute over 70% of the total trade deficit the U.S is recording with Africa. The majority of the African countries and mainly LDCs are recording a trade deficit with America.

The poor performances of the exports from African countries save for those that are endowed with rich mineral resource base are attributed to a number of factors which indicated below;

Factors affecting the growth the U-S-Africa Trade and Investment Relations

Some of the agricultural products in which African countries have competitive advantage are not included in the list of AGOA eligible products. These include coffee, tea and tested herbal medicines, among others. This has limited the scope of exportable products available to these countries. The majority of the provided would require African countries to begin, integrate and standards their production process. In other words agricultural based economies were not provided with an opportunity to start from the acquis (i.e. to start and build from the existing production systems in place), because the traditional products whose production system had already been developed are excluded from the AGOA.
Africa has not been able to attract U.S citizens to invest in Africa which is one of the mechanism through which Africa was expected to uplift its production levels.
The costs of doing business remain very high due to the supply side constraints.
The value chain of the agricultural products are not integrated due to lack of mid-level value addition investments. As a result Africa continues to export sem-finished or raw products. This plays to the advantage of the U.S since it provides an avenue to access the much needed raw materials for U.S industries.
Trade infrastructure is inadequate to facilitate the production, value addition and transaction of the products. Africa still lacks transport inter-connectivity that can be used to facilitate not only the backward and forward follow of goods but also to enable value chain integration or cumulation between African countries. In addition to transport infrastructure, Africa is yet to provide for adequate storage (include cold and warm chains stores) and warehousing facilities along the value chain of the targeted products.
The rules of origin and the standards requirements by the U.S are not favorable for the improvement of the U.S-Africa trade and investment relations. The requirements remain so stringent and sometimes unnecessarily above the international standards in order to provide Americans with an effective competitive level.
Predictability under the AGOA remains a very big hindrance to the attraction of targeted investments. The AGOA was first introduced for five years and later on extended for 8 years. But in both the first and the second AGOA the time has been so short for African countries to attract meaningful and targeted investments. An investment must be provided with an incubation period within which production will stablise and investment costs recovered before the returns to investment can be realized. The time allowed for this could be up to to ten years, a period longer than the duration of the AGOA itself. Therefore is therefore need for a more predictable and reliable regime within the U.S-Africa trade and investment relations will be improved. The AGOA should be extended for at least 15 years. Anything duration below, is simply not going to support Africa improve her trade relations with America but instead, it will only serve to provide a platform for the U.S to make propaganda of its efforts to uplift Africa.
Transaction costs are very high mainly because of the high transport costs. There are limited or no direct flights from Africa to U.S. These force exporters to go through Europe or Asia before delivering to the U.S. Exporters are made to pay unnecessary transport costs just because the U.S, accordingly for security reasons, has not accredited some of its airlines to fly directly to Africa. The persistent labeling of Africa as an insecure continent have continued to make direct roots as not worthwhile investment ventures.
There is limited collaboration between trade facilitating institutions in Africa and their counterparts in the U.S. For example on issues of sanitary and phytosanitary standards, the U.S food and drugs must accredit related products before they are imported into the U.S. There is however not much collaboration with the equivalent institutions in Africa to ensure that the requirements are adhered to and that the accreditation process is fast-tracked. This is also true with customs agencies as far as issues of tariffs and rules of origin are concerned.
Immigration visas to the U.S remain to most costly and unfriendly for business. The requirements and procedures involved do not necessarily promote movement of business persons from Africa to the U.S. As long as business people are not allowed to easily move to the U.S, there is no way that U.S-Africa trade and investment will improve.

The need for Africa to maximize from the U-S-Africa Summit

In a nutshell, African leaders will need to reflect on these and others issues in their engagement with the United States during their first ever US-Africa Summit. Africa must rise up to the occasion and call for terms of engagement which will promote mutually beneficial US-Africa trade and investment relations. It is important for Africa to move to the Summit with one voice and position on their expected outcomes. The U.S should be made to understand that there are now many world trade and investment players and that if they, the U.S, do not provide favorable terms, then there will be options for Africa in promoting its trade and investment relations with third parties. Africa has showed that it can emerge and so, this should be the opportunity for the continent to influence global economics to its advantage.

The U.S-Africa Summit: An New Effort to Keep Meaningful Trade and Investment Relations Between the Parties

2014-03-20T10:35:00.001-07:00

The United States of America will host the first U.S-Africa Summit on 5-6 August 2014 in Washington DC. The U.S wishes to use the Summit to strengthen ties with Africa, the world’s most dynamic and fastest-growing continent. The Summit will build on Obama's trip to Africa last year and will focus on enhancing the U.S-Africa trade and investment relations, cooperation on security and ensuring democracy in the territories of the parties.

In hosting the Summit, the U.S joins regions the likes of EU and Japan which have held such high level meetings before with African leaders. As Obama's administration has observed, Africa is increasingly growing into economic power house and is attracting and shifting the focus of the hitherto global economic powers. China has also changed the landscape and lenses through which the west looks at Africa. China is currently the single largest bilateral source of annual foreign direct investment (FDI) in Africa’s 54 countries. China’s investment in Africa of various kinds exceeds $40 billion, among which $14.7 billion is direct investment. In addition to investments, China's aid to Africa is almost free of conditionalities and is directed mainly to physical and productive infrastructure. Africa is, therefore, slowly turning to China something that is, to the west, a worrying development.

The west had until now capitalized on its aid and unilateral offers for trade preferences (the likes of AGOA and EBA) in attracting loyalty from African countries. On the basis of the existing or prospected aid, Africa assured investment deals and exported raw materials to the west. With Africa growing out of this economic doldrums end now beginning to influence the global economics, the west is worried and is changing strategies to ensure that either the status quo is maintained or if the change is inevitable, then it should remain in their favour.

In light of the above, the U.S has embarked on the process of reviewing the AGOA in order to ascertain its relevance and possibly refocus and align it with the current dynamics in Africa. In this regard the United States Trade Representative (USTR) launched fours studies in 2013 aimed at informing the U.S on how to move forward with the AGOA come 2015 and generally in focusing the U.S-Africa Trade and investment relations.

The first study will assess the trade and investment performance of the AGOA and the impact it has had on the economies of sub-Saharan Africa. More importantly to the U.S, the study will review the the AGOA against the existing current or potential sub-Saharan African reciprocal trade agreements and the objectives of AGOA. This will certainly be a big factor in the reauthorization of the AGOA. What is clear here is that the study will asses the implications of the Economic Partnership Agreements the European Union has or is negotiating with Africa against the non reciprocal unilateral arrangements (such as the AGOA) which until now, has been the basis for U.S-Africa trade and investment relations.

The second investigation, will assess the economic effects of providing duty-free treatment for AGOA imports on U.S. industries and consumers. In other words, the study will asses whether the AGOA is enabling access to raw materials and or promoting industrialization in the US. The study may also assess whether the AGOA optimizes or undermines the welfare of the U.S consumer. If the reverse is true, that is, if the AGOA is making the U.S consumer worse off and is promoting competition with U.S industries thereby impacting on the employment capacity of the country, then its reauthorization might be brought into question.

The third investigation is aimed at identifying possible changes to the rules of origin under the AGOA with the potential to increase exports from Africa. The issue here to note is that the U.S will be looking at how the AGOA rules of origin are promoting increased exports from Africa. Looking closely at this study together with the first two, one begins noticing that interest of U.S will be at the forefront in the reauthorization of the AGOA.

The fourth investigation will assess the impact of the EU-South Africa free trade agreement on U.S. exports to South Africa.This last study tells it all. The colonial masters are it again. The scramble for Africa has been relaunched to counteract the struggle for an economic independence which seems to be a new resolve by the African countries.

The dynamics in Africa have changed and the strategies of engagement are also changing. EU-Africa Summit will be held in April 2014. The first ever U.S-Africa Summit will be held in August 2014. China and Japan also began this kind of engagement with Africa in the last decade.

To understand what is behind the new economic and power strugles, one needs to read through the declaration of ministers in charge of foreign affairs, foreign trade and international co-operation at the end of their conference on China-Africa Cooperation held in 2000. One of the paragraphs reads "We reaffirm that the injustice and inequality in the current international system are incompatible with the trend of the times towards world peace and development, hinder the development of the countries of the South and pose threats to international peace and security. We stress that the establishment of a just and equitable new international political and economic order is indispensable for the democratisation of international relations and for the effective participation of developing countries in the international process of decision-making."

Okay, there you have it, Africa has come out of the political and economic doldrums and this is threatening the global stability. All the powers seem to me going back to the drawing board but this time round Africa is being invited to the table. The question remains, will Africa come out the winner?

EAC and U.S Experts Conclude Consultations on Trade and Investment Partnership in Burundi

2014-02-28T06:18:00.000-08:00

The East African Community (EAC) and the United States of America (U.S) engaged in an exploratory meeting on the proposed EAC-U.S Trade and Investment Partnership from 12-15 February 2014 in Bujumbura, Burundi. The meeting discussed the draft text of proposed Investment Treaty and approaches to the cooperation under the Trade Facilitation, TBT and SPS, Capacity Building and Commercial dialogue components.

The technical experts engaged in the EAC-US exploratory meeting made comments and clarifications on the terminologies and derogatory provisions in the proposed text for negotiations. Accordingly, both Parties are still consulting on how to treat terminologies "like circumstances" as used in the National Treatment and MFN provisions; "Customary International law" as a minimum standard that the Parties should apply in ensuring fair and equitable treatment to the covered investment; "prompt" in relation to compensation of expropriated investments; "indirect expropriation" in relation to what would constitute actions of Government which in turn would result into in direct expropriation; and "Senior Management" in the context that Parties should not condition an investor to employ a person of a particular nationality in the senior management level.

The EAC-US meeting discussed examples of some of the non-conforming measures that can be derogation from the application of the provisions on National Treatment and Most Favored Nations, performance requirements and senior management obligations. The meeting looked at three areas as some of the possible categories in which such measures can be derogated: (i) Existing policies, laws and regulation that would contradict the Treaty, (ii) the sectors which either Party would want to protect for purposes of public interest and (iii) those relating to the promotion of financial prudence in the economy.

The parties continue to also consult on other provisions in the draft text for EAC-US Investment Treaty including: limitations on performance requirements; denial of benefits to shareholding investors originating from third parties, subjecting taxation to indirect expropriation provision and exit clauses on the duration and termination of the Treaty, and the dispute settlement mechanism, among others.

Regarding the partnership on Trade Facilitation, Sanitary and Phyto-sanitary Standards and Technical Barriers to Trade, the EAC-U.S consultative meeting observed that there are in place related agreements at the WTO which can be used sufficiently to promote the cooperation between the U.S and the EAC.

The Parties agreed to consult on using Action Plan approaches under which the U.S would extend capacity building support to the EAC Partner States to enable them comply with their obligations under the related WTO agreements. The EAC-U.S consultative meeting observed that capacity building support by the more developed countries to developing countries is envisaged by the WTO agreements. Both parties are to continue with internal consultations on the matter.

As part of the capacity building partnership, the EAC-U.S consultative meeting reflected on the Obama Trade Africa initiative, the East Africa Trade and Investment Centre (TIC) in Nairobi and USAID partnership with Trademark East Africa. The parties are however yet to harmonize position on specific outcome of the negotiations under the Capacity Building component. While the EAC seems to be insisting on an outcome that includes a mutually agreed mechanism of delivery of support under the capacity building component, the U.S which is the target donor does not seem to be taking the same direction.

The U.S. Lawmakers and Trade Policy Officials Launch Debate on the Extension of AGOA

2013-12-30T06:20:00.000-08:00

The U.S lawmakers and trade policy officials have started debating the renewal of the African Growth and Opportunity Act ( AGOA) which is due to expire in 2015. The AGOA is a unilateral system of trade preferences that allows United States to import over 6500 different types of goods produced in Sub-Saharan Africa on duty-free quota free basis. The AGOA was originally designed for eight years; from 2000-2008 but was later extended to 2015.

A group of U.S. lawmakers and trade policy officials are examining the efficacy of AGOA in increasing investment, trade and job growth between African countries and the United States. Among the group lawmakers and trade policy officials are; bipartisan legislators-House Foreign Affairs Committee, the Senate Foreign Relations Committee, the House Ways and Means Committee and the Senate Finance Committee.

Along the same lines, the U.S. Trade Representative Michael Froman has asked the U.S. International Trade Commission (US ITC) to conduct four studies related to AGOA to inform the policy debates on the renewal of the AGOA. The studies are examining the performance of the AGOA since its launch in 2000. Consistent with his views expressed at the 12th AGOA Forum held in Ethiopia, the USTR is specifically interested in the; impact of AGOA on the business and investment climate in sub-Saharan Africa, possible changes to the AGOA Rules of Origin to promote regional integration as well as the likely impact of the EU-Sub Saharan Africa Free Trade Agreement on U.S. exports to Africa. A public hearing is scheduled for 14th January 2014 at the US ITC in Washington, D.C. Interested parties are expected to submit comments by January 21, 2014.

Meanwhile during the 12th AGOA Forum in Ethiopia, August 2013, the African Group called for extension of AGOA for not less than ten years. However history shows that the U.S has not operated the AGOA for a period of more than 8 years. Thus, extension of AGOA for more than 10 years seems to be far fetched.They also called for the revision of the AGOA rules of origin to reflect the development and capacity perspectives in Africa. The African group also called for extending the the third country fabric to run for the same period of the AGOA. But U.S is aware that that simpified rules of origin and a continued 3rd country fabric arrangement could provide an opportunity for the more advanced Asian economies to route their products to United States through Africa under the auspices of AGOA.

At the same 12th AGOA Forum, the USTR urged the parties to reflect on the benefits of a reciprocal relationship in form of a free trade agreement like the Economic Partnership Agreement between Sub Saharan Africa and the European Union or the form of a trading arrangement Africa is pursuing with China. The dynamic global forces seem to indicate that world economic powers are shifting their strategy of engagement with Africa. The gift or donor strategy is being refocused and increasingly, reciprocity is being seen as the way forward. Reading between the lines, the extension of AGOA seems to be in balance.

In a nutshell, although the U.S is not expected to drop a formal trading arrangement with Sub Saharan Africa, it remains to be seen, what the Super Power will decide come 2015. The less likely outcome is the extension of the AGOA in its current form. It is also not likely that the AGOA objectives will be dropped. But Africa should prepare for some surprises, the most likely outcome may be an an extension of AGOA characterized by a movement towards a more predictable arrangement and not necessary devoid of reciprocal pressures. The interest of the U.S. lawmakers and trade policy officials seem to say it all. They seem to be positioning to answer the question; what strategy can the U.S use to remain with a competitive space for trade and investment with or in Africa under the new global dynamics?

EAC Partner States to Align their Export Development Scheme with the EAC Custom Union Laws

2013-12-20T03:48:00.001-08:00

This week experts from the EAC are meeting in Burundi to discuss ways of aligning Export Development Schemes of the Partner States with the EAC Custom Union Laws; both the Protocol and the Customs Management Act.

The meeting is reviewing the the different laws, regulations and incentives that Partner States are implementing for Export Development with a view to harmonizing or aligning them to the Customs laws. Most important areas under review include compliance with the laws and regulations governing; the Export Processing Zones, Duty Drawback Schemes, Duty and VAT Remission Schemes, Freed Trade Zones, Industrial Packs, Special Economic Zones and Manufacturing Under Bond, among others

Going through the presentation of the Partner States it was noted that most of them are already complying with the provisions on export development as provided under the EAC Customs Union Protocol and the Customs Management Act. However, it has been observed that Uganda has not operationalized the establishment of the Export Processing Zones. It was also noted that Kenya is not complying with the EAC Customs Management Act as regards to the duty and taxes payable on compensating products at the of import duty appropriate on the manufacturing bond. They two countries have been urged to comply with their regional commitments on export development.

The meeting has also noted the need for the EAC region to combine efforts on export development in order to harness the economies of scale on the basis of which, among other reasons, the region is integrating. Some of the areas recommended for joint include, marketing, transport, joint investments, production enhancement mechanism and linking the value chains, among others

Empowering Border Communities through Modernization of Locally Shared Markets

2013-11-12T09:33:00.000-08:00

This week experts from the EAC Partner States are meeting in Kagali Rwanda to develop a project for empowering border communities through modernization of locally shared border markets. The concept includes development and modernizing a border market in such a manner that communities of both borders will utilize the facilities.

The Border Market is expected to position border communities to benefit more from the EAC regional integration. Under the locally shared border markets, Government of EAC Partner States will ensure that the markets are modernised and relevant infrastructure is established. Interventions will also include enhancement of the capacity of the producers and traders along the value chains of the products traded across the borders.

Some of the players expected to directly utilize the markets are; border institutions, cross border traders, communities living at the borders, providers of business support services such as hotels and banks, investors in storage and warehousing services, value addition processors and investors in social development services such as schools, health centers and recreation facilities, among others.

It is hoped that once the border market program is successfully implemented, it will transform communities living into meaning players in the regional economy. The border markets will also enhance intra-regional trade and reduce on the problem of foreign traders who penetrate and get deeper inland into a Partner State thereby disadvantaging the locals involved in the middle value chain of exports.

The borders which are expected to become mini-cities will also create employment opportunities which in-turn will reduce the problem of rural-urban migration by redirecting the labor force from the main cities of the Partner States to the borders.

EAC-COMESA-SADC Tripartite Trade Negotiations Forum Meeting in Entebbe 4-8 October 2013

2013-10-08T08:29:00.000-07:00

The EAC-COMESA-SADC Tripartite Trade Negotiations Forum (TTNF) concludes its one of the many rounds in Entebbe Uganda, today 8th October 2013. The TTNF is a forum of experts and senior officials of the on going negotiations for establishing an EAC-COMESA-SADC Tripartite FTA.

Negotiations under this Entebbe round covered SPS and TBT, trade remedies and dispute settlement, tariff liberalization and rules of origin. The TTNF meeting made progress on a number of other areas save for tariff liberalization where a number of countries were not ready with the offers. Only EAC, SACCU, Egypt and Mauritius had their tariff liberalization offers ready. However, the others were not ready and this curtailed progress on exchange of offers. Hon Amelia Kyambadde the Minister of Trade Industry and Cooperative of the Republic of Uganda who officiated the meeting emphasized the need for the Member States to finalize negotiations in time before end of April 2014 as per the Tripartite road. The Hon Minister called on Member States to finalize their offers in order to allow negotiations to start and conclude in time.

Regarding the rules of origin, COMESA and EAC maintained their stand on having a Tripartite regime whose thresholds cover products in a general manner. SACCU insists on the rules of origin which are product specific. This seems to be a thorny issues that will derail the progress under this component of the EAC-COMESA-SADCTripartite FTA negotiations. SACCU also made a number of reservations on certain areas the negotiations under the Trade remedies and called for further consultations.

In general, the Entebbe EAC-COMESA-SADCTripartite FTA negotiations made progress but the call for extended country consultations mainly by SACCU countries spearheaded by South Africa will undoubtedly delay the process.

The 12th AGOA Forum, Addis Ababa,Ethiopia- Civil Society Reflects on Measures to Support SMEs Development

2013-08-11T02:19:00.000-07:00

The 12th AGOA Forum is progressing from 9-12 August 2012 in Addis Ababa, Ethiopia. The forum began with a meeting of African Senior Officials who are reviewing the progress Africa has made under the AGOA. Various meetings have also been organized at the sidelines of the 12th AGOA Forum by the Private Sector, Civil Society and African Women's Entrepreneurship Program (AWEP). In one of the sessions organized by the Civil Society, participants reflected on what needs to be done to improve trade and investment performance of the small and medium enterprises (SMEs) .

Using the Korea and other Asian countries as an example, participants at the 12th AGOA Forum noted the need for African countries to develop and implement deliberate measures to improve the trade and investment performance of SMEs under the AGOA.

Participants noted that African countries should particularly focus on the following areas as part of the measures for improving trade and investment of the private sector especially the SMEs for them to benefit more from the AGOA.

Human resource development based on the industrial and market needs of the private sector
Financial support with clear targeted SMEs banking services including credit guarantee schemes
Focusing financing to non consumption expenditures
Ensuring contract monitoring
Prioritizing SMEs in public procurement
Promoting joint ventures on both vertical and horizontal basis in and outside the country. It was also highlighted that promotion that the focus should also be on SME-SME joint ventures instead of SMEs-Multinational which at times are some what difficult to attain
Provision of technical and extension assistance/services from production to markets
Development and implementation of the private –public partnerships with clear mechanisms of engagement and incentives for attracting private sector investments
Support to innovations through provision of venture capital and incubation services
Integration of the value chains with clear inward and backward linkages
Complete logistics support
Protection of Intellectual Property rights
Focus on product derversity, seasonal factors, organic and demand charactersistics of the products

The 12th AGOA Forum participants also reflected on the roles of the diaspora as a channel for enhancing the attraction of foreign direct investment targeting the AGOA market. It was noted that there is a need for improving market penetration to the U.S. The AGOA Forum proposed that the following measures should be considered by African countries in ensuring close trade and investment collaboration with the diaspora.

Ensuring that national laws on trade and investment are not discriminating against the diaspora especially in the area of access to land, share capital thresholds and management of enterprises
Utilizing the diaspora in the flow of market information regarding the prices, the distribution chains, possible trade partners and market regulations
The African countries should develop incentives to attract diaspora investment

There is need for the African entrepreneurs to form joint ventures with the diaspora

It was also noted that the African Chambers of Commerce should mobilize their members and provide a platform for close collaboration with the diaspora

The 12th AGOA Forum continues today with the meeting of African Ministers aimed at developing African positions in preparation for the two days Joint US-Africa Ministerial meeting starting tomorrow on 12th August 2013

High Employee Turnover can hamper efforts to create investment returns

2013-07-17T09:44:00.000-07:00

One of the many challenges that organizations face today, is to hire and retain good employees. An effective employee retention program can have a dramatic impact on organization's performance. Organizations have to grow together with their employees. An organization is only as good as the people it employs.As employees grow so does the business, and its bottom line. Companies normally understate this issue[1]. Most important assets in the organization are its employees, "they are the method by which they provide their service, and they create the first and usually lasting impression with customers, which becomes the cornerstone of the company's reputation." says Peter Criville, president of Shellville Services Inc.

An ineffective employee retention strategy has a bearing on the performance of an organization. It can consistently hamper efforts to create investment returns to the business of an organization. If nothing is done employee turnover, dwindling levels of retention, and the steady outflow of quality workers could result into high business cost for the organization. It is a mistake for companies faced with many challenges, such as increasing competition and decreasing margins, to be mindless on the issue of employee recruitment and retention. This will only end up costing the company more in the long run. Turnover has a direct impact on the success of the business and how consistently and efficiently it operates. It means the difference between success and failure and reputation in the marketplace.

The cost of employee turn over can range between 1/2 to 4 times an employee's annual wages and benefits. Organizations need to identify top performing team members and develop strategies to ensure they stay in the organization for as long as possible.

Employee retention has as much to do with how organizations hire and do after.According to Harvard Business Review, 80% of turnover can be attributed to mistakes during the hiring process.Traditional methods of hiring employees only provide a 14% likelihood of a successful job hire (Michigan State University)

Employee turnover needs not to been seen only from the perspective of those already employed. An organization that is not mindful of its employee turnover issues, risks having candidate employees leave even before they fully recruited. Such an organization will end up hiring employees who are not well fit for the job and the culture of the organization.

The importance of retaining top organizational talent cannot be understated. With the rate of employment growth in most economies especially developing economies, more and more jobs are increasingly available especially for the skilled and experience persons. What this means for employees is that it is now easier than ever to leave one's current position in search of greener pastures elsewhere. As competition takes centre stage in a fast growing private sector, employee turnover rates increases due to increased attractive markets for job seekers especially those with some level of experience. Of course where there is high unemployment levels, attracting employees might be simple but attracting quality skills is an uphill battle.

COST OF EMPLOYEE TURNOVER

Although it is neither possible, nor desirable to completely eliminate turnover from an organization, there are very real associated costs which an organization must be mindful about and where possible minimize them. Some of the costs associated with employee turnover are unavoidable and must be expected to occur in the normal course of business.

William G. Bliss in his article "cost of employee turnover" indicates that the costs of time and lost productivity in an effort to replace a staff are no less important than the costs associated with paying cash to vendors for services such as advertising or temporary staff. "These are all very real costs to the employer".

Some costs of employee turnover are obvious and come quickly to mind, but there other costs which equally have serious impact on business that normally are not taken serious by employers.

Turning over one employee can cost around 1/2 of a low skilled hourly workers annual wages plus benefits, while losing a member of upper management level can cost 3 to 5 times his or her annual wages and benefits. For example a firm employing 40 employees each earning $4,250 annually, the costs of turning over 10 of these employees over the course of a year will be at least $212,500. Severance pay can also be a huge part of employee turnover costs. This is especially true with highly skilled employees and high-level management. Such wage costs do have direct linkage to returns on investment.

The obvious costs of employee turnover include expenses on recruitment and or hiring a new staff. When an employee leaves the replacement process- hiring and selection cycle starts again. Significant costs of employee turnover included in this process can be advertising costs of announcing a job opening to the masses, cost of hiring a recruitment agency, background checks, reference checks, drug testing, cost of overtime pay, temporary help and much more. Once decision to hire has been made, the costs of turnover don't stop, but rather continue. Sign on bonuses, relocation costs, and any increases in salary level necessary to attract new talent all add up fast not to mention the time spent by the human resource to orientate and train the new employee.

Some of other costs that are easily quantifiable but are not normally given much consideration include; work overload, new job learning costs, loss of loyal customers, knowledge base losses and information linkages.

Loss of an employee affects the productivity of other employees who temporarily sit-in for their former colleague. William G. Bliss puts this productivity to at least 50% of the person's compensation and benefits cost for each week the position is vacant and other employees are sitting in and to 100% when completely vacant. It takes on average two month to recruit and hire a new employee. During this time productivity can seriously dwindle since the other employees who pick up the tasks and responsibilities. On top of being overloaded which of course diminishes their productivity, are also not necessarily familiar or trained for the task. This drains staff morale and further hurts productivity.

The negative affect on productivity continues even when a new employee is hired, he or she still has to be accustomed with the work. Of course the effect of declining productivity reflects itself in form of reduced business returns though it might be difficult to specifically attribute the cause to the turnover.

There is always a learning curve associated with any job which can be a considerable period of time but varying between individuals. It takes a new employee to catch-up with the rest of the staff. During this time, productivity cannot be as good as it is for the old staff.

Employee turnover can lead to reduced level of customer loyalty. This is significant loss to business. Many employees develop and share a real connection with customers as a result; they enjoy a loyal following of customers with whom they have related. When the employee leaves almost all of his loyal customers might move with him or her. It becomes worse when he or she has crossed to competition. The former employer can pay dearly; customers are sometimes loyal to the employee, not the company. The real cost is with the customer," Criville says. "Customers have a negative perception of a firm that has employees coming and going like a revolving door. Clients prefer to see the same faces every day. They get to know employees and gain a comfort level with them as a result they trust develops, job gets done and the customer pays.

Another serious cost to companies when they lose employees is the loss of organizational knowledge base. G. Bliss puts this loss to 50% of the person's annual salary for one year of service. Many employees are able to become experts in the field they work in and they leave with that knowledge base. They are no longer available to share this knowledge and mentor junior members in the company. In the event that they cross to competition, not only do they go with company valuable secretes, they also transfer the knowledge to the competition. Of course the impact is on business returns even if it might be near to impossible to quantify the actual effect due to the employee/s that left.

Then a staff leaves a manager has to understand what work remains, and how to cover that work until a replacement is found. This action could involve both time and money costs.

WHAT ORGANISATIONS CAN DO TO LIMIT EMPLOYEE TURNOVER

Although turnover is inevitable organization can apply some measures in order to reduce the scope. Some businesses (e.g. food services, accommodation, leisure and hospitality) are more susceptible and do experience higher turnover than others. Turnover is a challenge in these sectors, but it does not mean companies should cripple down.

Most of the turnover causes are around the mistakes in the employee selection process. Companies hire wrong people for the wrong jobs[2]. A Harvard University study attributes up-to 80% of employee turnover to mistakes made during the hiring process.

A Michigan State University indicates that for a successful job hire; traditional hiring techniques - resume reviews, interviews only provides a 14% accuracy, Reference Checks and Interviews contribute 26% accuracy, while Behavior-based Personality Assessment, Reference Checks and Interviews can contribute 38% accuracy. Meanwhile Abilities , Personality Assessment , Reference Checks, Interviewing can ensure at least 54% accuracy, while Values – Interests, Abilities, Personality Assessment, Reference Checks Interviews and can maximize at 66% accuracy. Finally Personal Attributes - Job Matching + all of the above can contribute 75% accuracy

Michigan State University study shows that effective utilization of powerful personality assessments are shown to increase the likelihood of a successful job hire to 75%.The power of these assessments is stunning and provides a powerful insight into the values, behaviors, and attributes the job candidate possesses. The report offers hope in regards to these horrendous odds of hiring the right employee. This information can then be compared against a Benchmark established for the job position and an informed hiring decision can now be made.

The report indicates that most employers use a combination of application, interviews, resumes and employment reference checks. These methods are best described as subjective. They are highly vulnerable to data distortion or falsification. Resumes are often exaggerated or falsified. Interviews are greatly influenced by "first impressions, appearance halo effects or chemistry". References are usually groomed or coached. They conclude that subjective recruitment and hiring methods provide useful, but limited information. They recommend use of modern recruitment methods like use on-line applications and interviews (this has limitation in a number of developing countries), integrity screenings and executive profile assessments, job matching benchmarks (reasons for existing job, knowledge needed, what cannot be done without it) and background verifications. The information collected is highly accurate and reliable. Screenings and profiles are not as vulnerable to faking or distortion and halo effects. Validity indicators on assessments help to verify the authenticity or candor of the candidate's responses.

The key to recruitment, Wendover says, is to identify and then target the exact employee a company needs. Without that specific knowledge, many organizations end up settling for whoever walks through their doors. "What does not work well is desperate hires, just putting an unqualified warm body into a position," Criville says. "That is a recipe for failure." It is not a good decision to settle for a second-rate employee simply for the sake of filling a position. If a person will not be around for long, why spend money training him or her just to do it all over again? It's probably smarter to pay overtime to current employees to fill the gap and take time finding an employee who makes the grade.

Becky Mollenkamp in her article "Recruiting and Retaining Employees" recommends that making connections with local educators, community leaders and other employers takes time and effort but pays. To her the effort is a more affordable and productive option. In fact, some businesses are so fond of referrals that they pay for them. "We believe good people know good people so we pay referral bonuses," Criville says.

It is important to immediately schedule interviews once candidates for a position have been identified. Timeliness is extremely important," Domboski says. "You can lose a good applicant an hour after they apply."

There are many other things a company can do to create an environment that discourages turnover. It should be noted however that some of these most popular benefits are typically the most expensive. But there are also plenty of free and inexpensive ways to reward and retain employees.

The most obvious way to attract and keep employees is to offer competitive pay. There are also a whole host of desirable benefits, each of which comes with a price tag. According to Becky Mollenkamp a company is more appealing if it offers affordable medical and dental insurance, paid vacation and sick days, a 401k, holiday bonuses, tuition reimbursement, health club membership and incentive programs tied to attendance or safety. These benefits help set the company apart from its competition and allows for recruiting the best candidates available.

Many firms in developing countries emphasize experience as a prerequisite for employee recruitment this means that for the experienced worker the switching costs of seeking new employment are no longer a significant factor in deciding whether or not to leave an organization. The implications for employers should be clear. It is now more important than ever to retain the team members a company.

In his book, Good to Great, Jim Collins highlights on the importance of having the right talent on the organizational bus. Hiring individuals who are truly fit to succeed in the position for hire dramatically increase the chances of that employee being satisfied with his or her work and remaining with the company for an extended period of time.

Clarity on the terms and conditions of work is also important in ensure employee retention. Communicationin the effort to retain employees to has become so important that it almost matches with salary scale itself. Employees need to know their roles, job description, and responsibilities within the organization. Any new company policies or initiatives have to be communicated to all employees to be sure that everyone is on the same page. Nobody wants to feel that they are being left out of the loop. Where there are no clearly defined performance benchmarks, employees will feel frustrated or discouraged. In a performance driven workplace a lack of clarity regarding job duties and expectations can cause fear and anxiety among employees who are unclear of what is expected of them. Even worse outright anger, conflicts and mistakes can occur when employees are not aware of what is expected of them. It makes it also difficult for a supervisor to objectively evaluate performance based on expectations and job duties that are not known. The result is unfair judgments that of course will not go down well with the victimized employees.

Involving employees in decision making is also important in ensuring their retention. In many developing countries most indigenous companies are individually owned. Decision making on critical issues remains in the hands of the directors or owners of the businesses. This has an implication in the level of participation of the employees in decision making. It is incredibly important to include team members in the decision making process, especially when decisions will effect an individual's department or work team. This helps to create a culture of employee involvement and will generate new ideas and perspectives that top management might never think of as important. When employees participate in setting limitations, targets and benchmarks for their performance, it enhances their morale to ensuring they achieve accordingly. However failure to have them participate can cause resistance, resulting into friction and job terminations

Employees are engaged in day today operations of the company and are thus well versed with the dynamics of works. Where work is in sections that are linked and synergized, allowing employees to share their knowledge with others will help the company to harmonize synergies and linkages. This will not only help increase the general performance of the employees, it will also make them appreciate general challenges and even devise means to overcome them. The sharing of information between employees facilitates mentoring and supervision since they are able to pick benchmarks and repercussions from within themselves. Information gap leads employees into mistakes they would never have committed if they were in the know of the traps in place and associated repercussions.

Shortening the feedback loop on employee performance is important to keep the employees in check but with minimal haggling which is a recipe for job terminations. It is important not to wait for an annual performance evaluation in order to get feedback on how an employee is performing. Most team members enjoy frequent feedback about how they are performing. Shortening the feedback loop will help keep performance levels high and will reinforce positive behavior. Feedback does not necessarily need to be scheduled or highly structured; simply stopping by a team member's desk and letting them know they are doing a good job on a current project can do wonders of boosting their morale and help to increase retention.

Employee retention also depends on compensation packages available. An employeewants to feel that he or she is being paid appropriately and fairly for the work he or she does. Employees take it upon themselves to find out what other companies and organizations are offering in terms of salary and benefits. They start knocking at competitor dowers in a situation where they feel they are not being offered competitive compensation packages.

Employers should provide adequate time for the employees to be with their families. Employees have families which are incredibly important to them as it is to their employer. When work begins to put a significant strain on one's family no amount of money will keep an employee around. Companies that do not stress the importance of balancing work and employee's personal life risk losing valuable staff. Incentives given to employees like extended lunch once a week, annual leave, and family reunion parties etc generate employee loyalty to an organization.

Opportunities for growth and development are important in ensuring employee retention. An employee will get bored and begin thinking of leaving the organization if he or she gets stuck in one position for along time with no possibility for advancement or new opportunities. Where there are no opportunities for growth and development in which employees acquire new skills, knowledge and stature, an employee will find that his future is hopeless and will look for that organization where he or she would be a good fit.

An employee will live longer with the company if the job provides career and makes him or her feel like an integral part of the team. Companies need to teach employees about the business and the industry as a whole, organize for them sectoral associates meetings and give them training on how business operates. "Developing an associate to feel self-worth, pride and a sense of belonging to our business is very important," Domboski says. "Since some are working independently or alone, motivation is a key in ensuring employee retention."

In an effort to ensure employee retention, it is also important to reward and recognize employees for their hard work. Employees at all levels in an organization want to know that their efforts are appreciated and recognized[3]. Recognizing employees for their hard work and let them know they are appreciated can be one of the single greatest factors influencing employee retention. Less costly and sometimes more extravagant actions like a short e-mail or stopping at a staff's desk and saying quick "thanks" can really boost morale. Other options include a mention in the company newsletter for outstanding performance or gift coupon to a restaurant or movie theatre, certificates of outstanding performance, performance based promotions - the possibility list is endless.

Employees want to have supervisors who are respectful, responsive, listener, courteous, and friendly. More importantly employees need supervisors who set clear performance expectations, deliver timely solutions and feedback, live up to their word and promises, and provide an environment conducive for growth and development. Failure by supervisors and management to provide this can cause an employee to start looking for greener pastures.

Employees prefer to work in an environment where there is fair and equitable treatment, where there is no favoritism and preferential treatment of individual team members. Inequitable treatment results in animosity and resentment in an organization. It leads to development of untouchables which creates noxious organization culture and foster resentment among team members. This culture gets worse and can create a devastating exodus of valued team members. Flexible scheduling is welcomed by many people, particularly those with childcare or transportation issues. Recognition in all forms, whether it is a simple pat on the back or a small monetary gift, keeps employees motivated.

Exit interviews are powerful tools. Encourage departing employees to honestly state the reasons they are leaving (an impersonal survey may encourage honesty more than a face-to-face interview). Consistent and similar same issues, such as low pay or lack of recognition may signal cause for investigation and need for changes in those areas. "People leave and it's the employer's responsibility to find out the reason why and pursue every avenue to halt future associates from departing." Domboski says

Companies need to prepare for turnover. Managers should constantly assess who is in their workforce, with an eye towards who may be likely to leave and when. If the average employee leaves after 5 years and there are several people who are in their fourth year of employment, chances are that there are a job opening within a year is most likely. Active recruiting and perhaps even doing some premature hiring or adding paid apprentices to a workforce could be a good strategy, where it is anticipated that an employee will leave soon.

It should be noted however that even companies that recruit carefully, offer every possible benefit and have a perfect training program will lose employees. Employee Turnover is a necessary evil; gone are the days employees remained with one company for the rest of their working time. In a global village today, people are more restless. All that the companies can do is to minimize the rate of employee employees leave.

[1] http://www.therainmakergroupinc.com/index.asp

[2] "Finding the right applicant can be as difficult as looking for a needle in a haystack," says Lynn Domboski, director of human resources for Matrix Integrated Facility Management in Johnson City, N.Y.

[3] Employees Place High Value On Being Appreciated David Saxby,

Obama Promises during Africa visit to Extend and Improve AGOA after 2015

2013-07-02T04:19:00.000-07:00

The US President Barack Obama promised during his visit to Senegal to improve the the African Growth and Opportunity Act (AGOA); the US initiative that allows African countries to access the US market on duty free Quota free arrangement. President Obama told joint press conference with his Senegalese counterpart Macky Sall that"AGOA will end in two years time. But I will seek for modalities to renew and improve the law to regenerate more trade and employment opportunities,"

The President's promise is good news indeed given that up to now US authorities had a clear signal that the AGOA will be extended come 2015. Now that the President himself has made the promise we can hope that the AGOA will be extended; after all the arrangement itself is a Presidential Initiative.

On the face of it, this should be good news to Africa. But of course we know that the President still has to convince Congress before the promise to extend AGAO can become a reality. There is still another huddle to over come. The US may extend the AGOA but the extension of its Waiver at WTO is also required. The extension of the WTO Waiver might turn out to be a serious huddle given that other countries like Cambodia, Bangladesh and Vietnam are also seeking for a similar preferential arrangement from the US. These countries will of course try to broke the extension of the AGOA waiver at WTO on grounds that the initiative is discriminating in nature as it does not cover all developing countries . The AGOA violates the Non discrimination requirement of WTO and that is why it must be provided a waiver at WTO. The current waiver expires with the AGOA in 2015. The likes of Cambodia have already used the WTO platform to express to the US their demand for the AGOA equivalent. It remains to be seen how this will play out.

In any case the period of extension will also determine the extent to which the AGOA will remain relevant to the economic development needs of Africa. At the moment some schools of thought say that the AGOA has not helped Africa realize economic growth as anticipated by the Act. It is said that the time span for the AGOA has always been a short period so inadequate to attract large scale foreign direct investments. As an example, this school of thought say that US citizens and others from more developed economies have failed to take advantage of this noble AGOA initiative because the arrangement does not provide guarantee returns to long term targeted investments. It is believed that this is so because of AGOA's short time nature and the fact that the initiative itself is unilateral thereby making it difficult for investors to predict its continuity after a certain period.

In addition, Africa has it own internal challenges relating to the supply side constraints. The challenges explain why since the launch of the AGOA in 2000, not many African countries have significantly taken advantage of the initiative. Save for a few countries-Kenya, Mauritius, Lesotho and Botswana, most of the other countries have not benefited as much. The American market is highly capitalistic with unique market demands. Penetration into the US Market requires clear response mechanism that address the constraints along the value chain and tailor the production systems to the US market needs and requirements. African countries continue to face challenges related to transport infrastructure, limited storage and warehouse facilities, limited investments in value addition, low capacities to comply with standards and rules of origin requirements, ignorance about the market, and un integrated value chains, among others.

Obama has promised will extend the AGOA but without clear response mechanism to address the above challenges, Africa will not effectively take advantage of the initiative. It should also be recalled that effective implementation of the response mechanism is also dependent on the duration of the AGOA.

In short, should AGOA be extended? yes. Will Africans benefit much from the extension of the AGOA? yes but only greatly if they are able to address the supply side constraints and attract plausible investments . But duration of the extended period of the AGOA is obviously going to be a key indicator in addressing the above challenges.

Finally the Least developed get more Eight Years to Implement the TRIPS Agreement and Protect Intellectual Property

2013-06-15T09:13:00.001-07:00

WTO has extended, for more eight years, the transition period the for protection of intellectual property by the least developed countries under the TRIPS Agreement. According to the TRIPS agreement, the deadline for the least developed countries to begin implementation was 1 July 2013. WTO members agreed on 11 June 2013 to extend the deadline to 1 July 2021 with a further extension possible when the time comes. This decision followed months of intensive negotiations with a group of countries and worked through consultations.

A number of least developing countries led by Nepal have welcomed the decision indicating that the extension of the transition period for protection of intellectual property will contribute to efforts to meet the target set at the UN conference on least developed countries in May 2011 — for half of these countries to reach the threshold level of development that would allow them to “graduate” from the category by 2020

However, it remains to be seen whether the least developing countries will actually utilize this transition period. Whereas the transition period for protection of intellectual property is important for this group of countries, history shows that they do not normally utilize the period to improve the status quo.

Whereas the protection of intellectual property has positive linkage to development, the least developed countries have continued to request for stay of application of the TRIPS agreement. This could work against them instead of benefiting them. May be WTO should always ask for a roadmap of activities to be undertaken within the transition period for protection of intellectual property before approving such requests. Protection of intellectual property is a tool for economic development because it is important in stimulating innovations, encouraging scientific research and product development. Above all, protection of intellectual property eliminates free riders thereby promoting motivation and guaranteeing returns to investments.

This therefore means that the least developing countries should work to protect their innovations rather than staying application of the intellectual property rights agreement. Many of these least developed countries have suffered from free riders especially to the hand of those in the developed economies. The free riders have not only taken advantage of the innovations in the least developed economies they have also gone ahead to protect them as if they were the originators. This transition period for the protection of intellectual property could actually be another harvest time for free riders.

As it is, the transition for period protection of intellectual property gives freedom to the least developing countries to choose whether or not to protect trademarks, patents, copyright, industrial designs, geographical indications or any other form of intellectual property covered by the agreement. Indeed a number of these countries have laws on the protection of intellectual property but they still have difficulties on the implementation process. A number of the least developed countries have not documented their geographical indications, they have fewer personnel with relevant skills, the citizens are not well informed of their rights and obligations and not many have registered their trademarks, patents and copyrights. Where they been able to register their property rights, protection has not been effective due to challenges related to enforcement mechanism.

With the above challenges in mind, the least developed countries are justified in their quest for stay of application of the TRIPS Agreement until when they have built adequate capacity to be able to implement it. But do these countries have in place a roadmap for addressing these challenges. Have they put in place response strategies and allocated necessary resources to improve on the status quo with a view to implementing the TRIPS at the end of the transition period for protection of intellectual property . Unfortunately, a number of them may still not be ready come 2021.

The fear for some of the least developing countries is that implementation of the TRIPS comes along with obligations which include compensating property rights owners in case their rights are violated. Some others argue that at the lower level of development countries need not to protect intellectual property as this would undermine the transfer and adaptation of the much need technology by the least developed countries. But did the developed countries develop through transfer of technology or through encouraging the development of technology? Which one should be encouraged most?

The EAC and U.S Techinical Level Makes Progress on Trade and Investment Partnership

2013-04-21T08:45:00.000-07:00

The East African Community (EAC) and the United States of America held a technical level meeting on Trade and Investment Partnership (TIP) from 17 to 20 April 2013 in Arusha Tanzania. The EAC-U.S Technical Level meeting made progress on the four components of the Trade and Investment Partnership. The meeting finalized the Terms of reference for the Commercial Dialogue and made consultations in the other three components, that is the proposed; Investment Treaty, Trade Facilitation and Continued Capacity Building.

The EAC-U.S Technical Level meeting made recommendations on the four components for consideration by the Ministerial meeting scheduled for end of June 2013 at the sidelines of the AGOA Forum in Addis Ababa, Ethiopia.

On the ToRs for EAC-U.S Commercial Dialogue, the EAC-U.S Technical level meeting on Trade and Investment Partnership made recommendations on the scope, objectives and priority areas to be covered under framework. The meeting noted that the objective of the Dialogue should be improving the trade and investment relationship between the EAC and the U.S through private-private sector engagements, private-public engagements and public-public engagements. As regards the scope, the meeting recommended that through the Dialogue, both parties should at the private-private sector level identify policy constraints to trade and investment development and present for consideration by both governments. The EAC-U.S Commercial Dialogue should also promote the business to business engagements including undertaking of business missions, trade fairs and developing joint ventures and business deals. Priority areas for consideration under Commercial Dialogue should include promotion and enhancing trade and investment in Energy, infrastructure, ICT and outsourcing, Trade in Services such financial services and tourism, agro-business, value addition and industrialization. The priority areas are to be presented to the private sector of both parties for further discussion and enrichment.

Regarding Trade Facilitation, the EAC maintained that the EAC-U.S Trade and Investment Partnership should address all barriers to trade and not just customs constraints as proposed by the United States. The Trade Facilitation Model Agreement proposed by the U.S focuses on addressing customs related operations including, Express shipment, advance ruling, transparency, transit procedures, customs valuation procedures and rights of appeal of cargo owners. The EAC maintains that although customs issues are important especially in enabling free and faster movement of goods across the borders, they are not the only constraints to export development especially in trading with the United States. The EAC observes that as a region they also affected by other other constraints such as stringent Sanitary and Phyto-sanitary rules, requirements under the rules of origin, non tariff barriers including the lack of a direct flight to the U.S and the lengthy and costly U.S visa requirements. The U.S insists that the issues being raised by the EAC cannot be included under the Trade Facilitation agreement given that even at the WTO, they are negotiated separately. The parties agreed to consult further and revert with a view to reaching a common understanding.

On the proposed U.S. Model Investment Treaty, the EAC-U.S technical level meeting on Trade and Investment Partnership consulted and made clarifications on the various provisions included in the model. The EAC made observations and sought for clarifications from the U.S. side on various terms and clauses included in the document. The Parties agreed to continue exchanging information on the interpretations of the various areas with a view to reaching a common understanding on the document before negotiations can be launched.

The meeting also covered capacity under the U.S presented to the EAC its trade and investment areas they are or have been supporting. The U.S indicated that they are supporting the Secretariat to implement EAC decisions regarding customs operations relating to one border post, simplified rules of origin and the development interface frameworks to enable data interchange between the Customs Authorities. The U.S Also indicated that they are supporting EAC Partner States at the national in a number of areas including firm level interventions.

EAC on its part appreciated the support U.S is providing to the EAC but called on the U.S to consider broadening the scope of capacity building to enable EAC address some of its other priority areas. The EAC observed that under the TIP, the parties should devise and bring on board new elements to capacity building. The new elements should include development additional priority areas and ensuring effective coordination and delivery of support. Both parties agreed to continue with consultations on the matter with a view to reaching a common position for consideration by the Ministerial meeting in Addis Ababa, Ethiopia.

The 16th COMESA Summit in Kampala to Focus on MSMEs Development

2012-11-02T05:26:00.001-07:00

Uganda will host the 16^th Summit of the Common Market for Eastern and Southern Africa (COMESA) Heads of State and Government on 23^rd-24^th November, 2012. The 16^th COMESA Summit will be held under the “Enhancing Intra-COMESA Trade Through MSMEs Development,” as a way of emphasizing the importance and central role that Micro, Small and Medium Enterprises (MSMEs) are playing in the economies of our Member States. This is good news because it shows that the leaders of COMESA are now finally embarking on promoting MSMEs and enabling them to access the intra-regional market.

An EAC study of 2010 indicates that the MSMEs sub-sector is the biggest employer and constitutes about 90% of the private sector in the EAC region with contributions to GDP of 20% in Uganda, 33% in Tanzania and 50% in Kenya. Despite this significance of the MSMEs, the report shows that the subsector is sometimes regarded as constituting survivalist entities operated by school leavers and job seekers awaiting formal employment, retirees, retrenchees or people supplementing their low incomes from formal jobs.

The study also shows that the activities in MSMEs are mostly characterized by easy entry and exit, self-employment with a high proportion of family workers and apprentices, reliance on indigenous resources, small scale of operation with little capital and equipment, high labour intensity, limited adaptation of modern technology, low skills with acquisition of skills mostly outside the formal schooling system, lack of access to organized markets for key resources (financial markets, education and training) and lack of access to supporting services. According to the study the subsector is seen as functioning as a fallback position. This outlook has sometimes not helped to develop MSMEs especially micro into dynamic private sector activities.

It is therefore well-timed for the 16^th COMESA Summit to seize this opportunity and recorgonise the role played by the MSMEs. If implemented, the measures to be put in place by the heads of state should put the COMESA region on the right path to achieving sustainable development. COMESA needs to attain competitive intra-regional trade and investment in order to achieve its development goals. The 16^th COMESA Summit should therefore development measures to support Member States enhancing the capacity of entrepreneurs especially the small and medium enterprises with a view to enabling the region attain market competitiveness supported by high-tech production and inter-connected market systems.

COMESA and the Member States must support the MSMEs to enable them meaningfully become the private sector sought to be the backbone of the economy. Effective measures are required to support the MSMEs in; ensuring that production is aligned to market standards, harmonizing policies and regulations impacting on both internal and cross border trade and investment; facilitating the free and faster flow of goods and services; improving information flow of market opportunities; improving and simplifying access to trade finance; opening and widening portential investment and trade opportunities; enabling transfer of appropriate technology and promoting regional business linkages and transactions, among others

The 16^th COMESA Summit is expected to among others discuss the COMESA Free Trade area, COMESA Customs Union and the EAC, SADC, COMESA Tripartite free trade area. Other issues that are likely to be on the agenda include reports on the directive by the Heads of State to the COMESA to work with member states in the establishment of Science, Technology and Innovation Parks, and priority industry clusters and the development of mechanism for exchange and sharing of experiences amongst Member States

At the sidelines of the Summit, the private sector will hold a business forum under theme “Promoting Intra-COMESA Trade through Micro, Small and Medium Enterprise Development – Seizing Opportunities for Innovation and Prosperity in Business”. The forum presents an opportunity for the private sector form the COMESA region to dialogue and work with Governments in determining policy interventions necessary to create an enabling business environment. This forum should help bring out relevant regulatory reforms and interventions that for COMESA to undertake in promoting the growth and emancipation of small and medium enterprises (SMEs). The forum should also review and come up with clear and robust innovative ideas and conventional ways of strengthening the SMEs in order to attain meaningful intra-regional trade and sustainable regional development.

Progress on the EAC-US Trade and Investment Partnership

2012-10-27T11:38:00.002-07:00

The East African Community (EAC) and the United States Government announced on 19th October 2012 the progress under the EAC-U.S. Trade and Investment Partnership (TIP). In their Joint Statement issued on Friday last week, the EAC Ministers of trade and investment in the EAC Partner States and the Deputy United States Trade Representative (USTR) announced that they have taken "important steps" to advance the Partnership.

Releasing the Joint Statement the Minister of Trade, Industry and Cooperative, Hon Amelia Kyambadde who co-chaired the Joint Press Conference noted that the new initiative will support the economic integration of the EAC and enhances the EAC-U.S. trade and investment partnership. The Hon Minister said that the new Partnership is built on the recognition of the important role that trade and investment play in economic and social development including job creation, both in East Africa and the United States.

On his part, the Deputy USTR said that the EAC and the United States agreed on a framework to move forward on the establishment of a Commercial Dialogue, which will be formally launched in late November 2012. Commercial Dialogue is a component under the TIP that establishes a consultative mechanism which will serve as a cornerstone of linking and engaging Governments with the private sector of both Parties. The dialogue will focus on promoting effective public-private partnership, which are a critical mechanism for attracting greater U.S. investments to the EAC region, especially in the area of infrastructure development, supply of services, mineral development and manufacturing. The Dialogue will implement its activities through targeted sector trade missions, activities and events; coordinated programs between U.S. agencies and their EAC counterparts in conjunction with trade associations and the diaspora. The East African Business Council will lead the EAC private sector in engaging with their counterparts in the U.S.

According to the Joint Statement the EAC and the United States also agreed that their respective technical teams will meet at the soonest possible date for further consultations and negotiation on the other three components of the EAC-U.S Trade and Investment Partnership, that is; a bilateral investment treaty, a trade facilitation agreement and continued capacity building.

The Bilateral Investment Treaty (BIT) aims at;

· Protecting investments in the territories of either Party where investor rights are not already protected through existing agreements;

Encouraging the adoption of market-oriented domestic policies that treat private investment in an open, transparent, and non-discriminatory way; and
Supporting the development and application of international law and standards consistent with the objectives of the cooperation.

The Parties will also negotiate and sign a Trade Facilitation Agreement which will provide for development and implementation of policies that promoted efficiency in the territories of the Parties through reduced transaction costs associated with the enforcement, regulation, and administration of trade policies.

The technical teams will further discuss and agree on the trade capacity building assistance, including identification and agreement of priority areas for support under the Trade and Investment Partnership. The EAC has identified the priority areas for the U.S support under the EAC-U.S Trade and Investment Partnership including the strengthening of region Integration by supporting EAC Partner States on

Harmonizing customs regulations, improving customs inter-connectivity and harmonization of standards,
Development of an efficient regional payment system, customs and financial market integration
Establishment of an efficient regional infrastructure
Promotion of technology transfer
Development of capacity for trade and business development.

Through consultations the EAC will identify more priority areas for support under the EAC-U.S Trade and Investment Partnership. The negotiations may include development of a binding mechanism for delivery and implementation of the program under the capacity building support.

The EAC Ministers acknowledged that the United States already provides substantial assistance to the EAC Partner States and the Secretariat, including an additional amount of up to $10 million (ten million United States Dollars) that the United States will provide over the next five years to the EAC Secretariat to support regional economic integration.

As the next step, the EAC Ministers and the USTR agreed to advance the EAC-U.S Trade and Investment Partnership within their respective administrations. They also agreed to hold their next Ministerial meeting on the margins of the 2013 AGOA Forum.

The EAC-U.S TIP negotiation process was initiated and announced by the EAC Ministers of Trade and the USTR at the AGOA Forum in Washington D.C. earlier this year. In the first Joint Statement released on 14^th June 2012, the EAC and U.S announced that the new EAC-U.S. Partnership will build on the foundations of the existing trade and investment relationship, including the African Growth and Opportunity Act (AGOA), and the U.S.-EAC Trade and Investment Framework Agreement (TIFA). In addition, the Statement indicates that the TIP will provide new business opportunities to U.S. and EAC firms by reducing trade barriers, improving the business environment, encouraging open investment regimes, and enhancing two-way trade. It is hoped that the EAC-U.S Trade and Investment Partnership arrangement will also serve as a building block towards a more comprehensive trade agreement over the long term.

The EAC-U.S. Trade and Investment Partnership is also an important component of the U.S. Strategy Toward Sub-Saharan Africa, which President Obama announced in June 2012. The Strategy outlines four main pillars which include.

Strengthening democratic institutions,
Promoting economic development,
Ensuring regional security, and
Continuing to improve development assistance initiatives.

The strategy makes clear that the focus of Obama’s plan lies in the first two pillars.

Lesson on High Level Poverty Problems in Africa Vs the U.S. and China

2012-09-05T01:48:00.000-07:00

I am sure you have been told that high poverty levels is one of the major problems in Africa. But hold your thought and may be assess it after you have read this post. Should the high level of poverty in Africa be a source of concern to the international community? Should we be worried about the poverty level based on the specific numbers or on the ratios? The total of all people in Uganda (34.5m, 2011) , Botswana (2.09m), Swaziland(1.38m), Namibia (2.16m) would be below the poverty line in America. A report from Indiana University found out that increasing numbers of Americans are still below the poverty line. In 2006, it was 36.5 million people, by 2010, it was 46.2 million and a further increase was predicted for 2011, given the way the economic crisis has dragged on.

Interestingly all the above African countries are beneficiaries of the support to reduction of poverty from the U.S. in one way or another. One element that you may need to note is that a poor person in the United States is actually poor. In Uganda about 32% (about 11 million people) of the population leave below poverty line, i.e. they earn less than a dollar a day. But come to think of it, all these people continue to live without external support. In other words, they earn just enough survive marginally. An American in the same position must get supported or he or she will starve. Could it be that the problems in Africa are not well analyzed or if they are, may be they construed to fit some interests?

So why do reach countries continue to support less developed countries on the fight against poverty in Africa when in their countries the situation is staggering also? China has over 100 million people living below the poverty line. Actually all the people in Uganda, Rwanda and Kenya would be below poverty line in China despite its emergence as the world's second largest economy. Yet China continues to pump money to African economies instead of concentrating on elevating its own people out of poverty. Of course the amount of money China is using in country to fight poverty is excessive but I am sure that if they diverted what they are spending in the continent, purportedly to solve problems in Africa, they would have everybody in china above the poverty line.

Could it be that developed countries continue to support Africa such that they too can keep their own poverty levels low? What i do not understand, is why a breadwinner of a household would donate food to a neighbor at the time when his or her own family is starving? Could this happen in a situation where it is also true that the continued survival of the house hold would be guaranteed, only and only, when the purported starving neighbor must also be given aid? Could it be true that developed countries actually continue to support developing countries as a mechanism to reducing economic imbalances in their home countries?

If we do not consider ratios and instead use absolute numbers, do we come to a conclusion that poverty in Africa is higher than the level in other continents? If in country A there are more people who are actually poor but ratio wise they are fewer in comparison with country B, does that mean that A is better than B?

The other irony which still eludes my mind is the fact the gap between the poor and the rich in the developed countries is also staggeringly high. Again this is one of the reported problems in Africa. But according to a 2010 Federal Reserve Board report, the net worth for all United States households was $53.1trillion. The net worth of the poorest 60% of U.S. households was $1.26 trillion. The net worth for the Forbes 400 was $1.37 trillion. Therefore, the richest 400 people in the United States have more wealth than the bottom 60%, nearly 160 million people (Forbes, 2010, September 22). But how is this being acceptable by America when in their drive to ensure good governance in the developing countries, this is one of their biggest concerns?

We in the developing countries what lessons do we learn from the above situation. Some school of economist believes that a country requires a middle class for it also to be a middle income country. It is easier and cost effective to collect taxes from a few than it is from very many people. Fewer but rich can easily be mobilized to support a developmental goal of the country than when they are many. Resources are limited and if they are in the hands of the many they are scattered and will have minimal incidence to the economy and to the individuals owning them. For effective utilization of resources, they must be concentrated and specialized in the production process. For these reasons, a middle class is inevitable and will always be a small fraction of the population.

Probably the U.S. is following up from the above arguments. But in Africa the development of a middle class where the so rich are fewer is discouraged. The developed countries are at the helm of discouraging African from pursuing this line. Instead we are advised that in order to solve problems in Africa, we should ensure that everybody averagely wealthier. In other words scatter resources so that almost no one has the ability to form a global corporate company that can influence global market dynamics. Can Africa learn to learn from the development path of their colonial masters?

EAC-US Begin Discussion on Trade and Investment Partnership, 26th July 2012, Arusha, Tanzania

2012-07-27T13:19:00.003-07:00

The East African Community has begun consultations with the United States Government with a view to starting negotiations on the Trade and Investment Agreement (TIP). The negotiations of the EAC-US Trade and Investment Agreement are based on the Policy Strategy of Presidents Obama's Administration’s on Sub-Saharan Africa which was released on June 14 2012, The Strategy outlines four main pillars which include.

Strengthening democratic institutions,
Promoting economic development,
Ensuring regional security, and
Continuing to improve development assistance initiatives. The strategy makes clear that the focus of Obama’s plan lies in the first two pillars.

The EAC-US Trade and Investment consultation meeting which began on 26th July 2012 in Arusha, Tanzania is in response to the directive of EAC Ministers responsible for trade and the United States Trade Representative in a Joint Statement released on June 14, 2012 on the sidelines of the AGOA Forum between the United States and the East African Community (EAC) Partner States, in Washington, D.C. The Statement recognizes the importance of strengthening the economic links between the United States and East Africa, by pursuing a new Trade and Investment Partnership between the United States and the East African Community.

Through the EAC-US Trade and Investment Partnership the parties will build on the foundations of our existing trade and investment relationship, including the African Growth and Opportunity Act (AGOA), and the U.S-EAC Trade and Investment Framework Agreement (TIFA) to provide new business opportunities to U.S. and EAC firms by reducing trade barriers, improving the business environment, encouraging open investment regimes, and enhancing our two-way trade.

In the Joint Statement the parties agreed to explore under the new umbrella partnership; a regional investment treaty, a trade facilitation agreement, continued trade capacity building assistance, and a commercial dialogue. It hoped that these agreements and other activities that they will pursue will help to promote EAC regional integration, economic growth, and expand and diversify EAC-US Trade and Investment. They could also serve as building blocks towards a more comprehensive trade agreement over the long term. The Joint Statement directs the respective technical teams to begin consultations on each of the agreed areas of the EAC-US Trade and Investment Partnership.

In the meeting, the parties proposed an ambitious timeframe for regular engagements at all levels which will include Experts, Senior Officer and Ministerial levels as indicated in the table below.

	EAC Side	US Side
1.	EAC Ministers led by Trade Ministers	USTR
2.	Permanent Secretaries (Senior Officer)	Assistant STR Africa Affairs
3.	EAC Experts Officials	US Expert officials

The US team expressed interest in understanding the state of play on the trade and investment regimes in the EAC Community. A number of areas were highlighted for consideration in the development of the Investment Treaty whose main objective is to increase FID to the EAC region. They include provisions on;

National Treatment and Most Favoured National principals as applied at the WTO
Fair and Equitable treatment
Free transfer of capital
Obligation on compensation in cases of expropriation
Transparency especially on publication of policies
Allowing advance comments on new policies
Rights of investors on recruitment of personnel
Performance Requirements, and
Dispute settlement mechanism

The Investment Treaty will allow policy space for either party to act in a manner that contravenes the agreed terms for example in situations where there is a security or a balance of payments issue. It will not necessary include sector specific provisions. Negotiations will follow after initial consultations on the investment regimes operations in the jurisdictions of the two parties. The consultations will then highlight the areas for negotiations as part of the process to developing the Treaty. The meeting agreed to hold regular technical committees meetings in order to generate enough workload for the Ministers.

On Trade Facilitation the US indicated that they are interested in improved customs processes and procedures. They listed the following areas as the areas to be negotiated

Publication and Transparency
Simplified procedures and faster release of goods
Expedited Shipments
Appeals
Advance rulings
Simplified procedures and guarantees on transit goods
Implementing a Leniency system on the Penalty regime
Exchange of information on customs procedures
Elimination of consular fees and formalities

The EAC on its part expressed interest in negotiating additional areas such as;

The simplification of SPS and Rules of Origin to exporting to the US,
Removal other non-tariff barriers to exporting to the US
Cooperation on development and implementing IPR regime within the EAC
Trade infrastructure development

Regarding Capacity Building, the US shared with the EAC the areas the possible areas support relating to trade and investment. These include;

Customs Union: Harmonizing Customs Regulations, evaluations, clearance audit and customs interconnectivity, harmonizing standards on staple foods, and supporting to member states on harmonizing SPS
Common Market: development of efficient payment systems including electronic cross border payments, integrated border management, implementation of the simplified certificate of origin, development of a web based trade statistical data base( www.rfbs.in ), and financial market integration
Regional Infrastructure: development of financial regional infrastructure, ICT development, technology transfer and infrastructure investment as a whole
Regional Productive Structure: Integrating staple foods into the regional markets through improved technology, provision of inputs and increasing private sector investment in the region. Support is also directed to cleaner energy and global climate change as part of the effort to promote sustainable natural resource management
Support to EAC Institutions: Support has been support to Lake Victoria Basin Commission on the water trans-boundary water for biodiversity in the Mara-River Basin Initiative. The US Government also supports the safe skies for Africa including the EAC on establishing Civil Aviation Safety and Security Oversight Organization
Training on policy development, SPS, codex etc

On Commercial dialogue, the meeting noted that the proposed consultations process will serve as a cornerstone of linking, informing Governments on private sector priorities. The forum will help in linking the private sector agenda to Government programs. It is proposed that the dialogue should focus on promoting effective public-private partnership (PPPs), which are a critical mechanism for attracting greater U.S. investment, to the EAC region, especially for infrastructure projects. The dialogue will implement its activities through: targeted sector trade missions; coordinated programs between U.S. agencies and their EAC counterparts in conjunction with trade associations, regional and diaspora chamber activities and events.

African Union Summit Concluded With Commitment on Increasing Intra-Africa Trade, Addis, 16 July 2012

2012-07-24T00:17:00.000-07:00

African Union Summit concluded in Addis Ethiopia on 16 July 2012, with African Leaders committing on the theme of the Summit “boosting intra-Africa trade”. The Summit which elected Ms Nkosazana Dlamini-Zuma of South Africa as Chairperson of the African Union Commission Mr. Erastus Mwencha of Kenya to be the Deputy, noted the need infrastructure development with a view to linking up the continent. The Summit also emphasized the principal of progressive integration and allowing the regional blocs to consolidate their integration goals as part of the process promoting intra-Africa trade.

One speech was particularly spot on. This was the speech by the President of Uganda, H.E Yoweri Kaguta Museveni. The President noted that intra-Africa trade is low because the continent is not linked. He noted that the construction of the hardcore surface roads and railways which link the East Africa region to Kisangani, Juba and Addis Ababa is must.

On energy, President Museveni reminded his counterparts that Africa generates very little energy which cannot enable the continent improve intra-Africa Trade not even meeting its minimum industrial development goals . He noted that the sub-Saharan countries excluding South Africa produce only 28 GW of electricity equivalent to the output capacity of Argentina or just 2 more GW of what is produced by Norway. President Museveni said that whereas countries like the US have a Kilowatt Hour (KWH) Per Capita of about 13000, some countries in Africa only have a KWH per capita of 12. He also compared Africa with some of the emerging economies such as Singapore whose KWH per capita is 7948, South Africa 4532 and Libya 4170. The President noted that although Uganda has achieved the KWH per capita of 200 up from 28, this is not yet enough to enabling the country attain industrial development.

President Museveni called on Africa to wakeup and address infrastructural constraints which he said are hindering intra-Africa trade development. The President called on the friends of Africa to support the continent in building and enhancing infrastructure rather than just talking about other small things such as homosexuals noting that “even the homosexuals need electricity”. The President also highlighted the need for African Governments to improve on connectivity especially in the area of air and maritime transport which he said that their contribution to intra-Africa trade has been insignificant. He also observed that deficiencies in the communication sector are also hindering intra-Africa trade development noting that currently it easier and cheaper for business persons to call their European counterparts than those in Africa, a situation he said deos not facilitate intra-Africa trade.

The meeting also reviewed the progress in achieving the Millennium Development Goals noting that although some progress has been made especially in regard to poverty reduction, education and emancipation of women and youth, the continent has not done well in other areas.

On the conflict situation in Africa, the African Leaders condemned the acts of Al-Shabab in Somalia, the LRA in East and Central Africa, the rebels in DRC and Mali. The leaders resolved to take action on the rebels in Mali. The Summit recognized the efforts of the AMISON, the African Union Mission in Somalia. Countries such as Uganda, Kenya, Burundi and Ethiopia were particularly appreciated for their efforts in ensuring peace and security in Somalia. The leaders also called on Sudan and South Sudan to observe peace and cease hostilities.

G-20 Governments Demonstrate Leadership-A call in the Interagency Report

2012-06-19T23:01:00.001-07:00

Formed in 1999, the G-20 represents 85% of the world’s economy and two-thirds of world’s population. The G-20 aims at providing developing countries with a better position to influence the dynamics of the global economy. Now, the Interagency Report on “Sustainable Agricultural Productivity Growth And Bridging The Gap For Small-Family Farms” recommends that G20 Governments should “demonstrate leadership in multilateral negotiations. The Interagency Report which was published on 12 June 2012 by a group of multilateral organization (Bioversity, CGIAR Consortium, FAO, IFAD, IFPRI, IICA, OECD, UNCTAD, Coordination team of UN High Level Task Force on the Food Security Crisis, WFP, World Bank, and WTO), emphasizes the need for G-20 need to demonstrate leadership in order to strengthen international disciplines on all forms of import and export restrictions, as well as on domestic support schemes that distort production incentives”.

The Interagency Report, which was used as a key input in the discussions of the G20 Agricultural Group, was compiled in response to the request to international organization by the G20 President early 2012 in Mexico to examine practical actions that could be undertaken to sustainably improve agricultural productivity growth, in particular on small family farms. The Interagency Report states that “substantially reducing trade and production distorting domestic support, improving market access opportunities, eliminating export subsidies and strengthening the disciplines on export restrictions will improve the enabling environment for investment and productivity growth”.

The Interagency Report also notes the critical role played by the WTO’s Sanitary and Phytosanitary Agreement in contributing to the reduction of production losses due to pests and diseases, and the need to support capacity building in this field, including through the Standards and Trade Development Facility.

Africa Needs Development Infrastructure Rather than Transit ones

2012-04-02T07:08:00.002-07:00

African countries do not lack infrastructure, rather they lack what i refer as targeted production and trade development infrastructure. I know this might seem confusing but come to think of it, is there any country without basic roads or without airports? I am yet to find one. All the countries i have visited do have at least basic infrastructure.

So then what is the problem? why is it that infrastructure remains part of the supply side constraints to most of the African countries. The problem is in the purpose and why the existing infrastructure was established in the first place. Actually most of the roads are used for transit of persons from one end to another. They are not used as development infrastructure.

A development infrastructure to me, as that one which harnesses forward and backward linkages in the production process. In other-words, the roads should actually carry consignments of course together with the people. But the case in most of the African countries is a reverse. Most roads carry people without consignments. Where they carry consignments, it is one way, no return journeys are made with goods. To me such a road is not a development road, it is just a transit road.

A similar scenario pertains to other modes of transport, the rails, air and water transport. They are simply used for transit but not for development.

My call to all African Government is to think of utilizing infrastructure for development rather continuing to think we do not have relevant infrastructure. Just anchor at one end of the road a value addition project and at on other end a project that provides inputs to the one of value addition. Make sure that in between the road, there are other investment that enhances the projects either by supplying to them or by utilizing their outputs. This way the concept of development infrastructure will be meaningful. This way we will even be able to estimate the benefits of the road we intend to construct. By the way, how do the planners estimate the benefits of the roads constructed due to political pressures rather than an economic demand ?