Tag Archives: development
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Zimbabwe should…

30 Oct

Zimbabwe should engage China, with about US$36 billion for investment in special economic zones, to attracting foreign investment to resuscitate critical sectors of the economy-Comesa secretary-general Dr Sindiso Ngwenya

Should African countries look for Foreign Direct Investment (FDI) or mobilise local resources?

Send your comments to: info@afrodad.co.zw

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Look East for FDI, Comesa boss tells Zimbabwe

30 Oct

Zimbabwe should engage China, with about US$36 billion for investment in special economic zones, to attracting foreign investment to resuscitate critical sectors of the economy, a senior Common Market for Eastern and Southern Africa official said.
Presenting a paper on value chains and their roles in economic development at this year’s edition of the Zimtrade Exporters Conference in Harare last week, Comesa secretary-general Dr Sindiso Ngwenya said this country could court successful economies such as China for investment.

The first step would be the consolidation of special economic zones, which are areas designed to export goods and provide employment while they are exempted from certain taxes and quota laws meant to make goods manufactured in those zones fetch competitive global prices.
“In China, Shenzhen is a success story of a special economic zone which was established in the 80s and by 1994 the city was accounting for 35 percent of total Chinese exports, Zimbabwe should therefore go the SEZ route in order to revive critical sectors.
“Zimbabwe, therefore, needs to engage China to get that investment which can be channelled towards establishment and rehabilitation of power plants and revival of the manufacturing sector,” he said.

Mr Ngwenya said value addition was an effective strategy that would help Zimbabwe capture its fair share of the global market.
“Even the country’s vast minerals are not fetching enough revenue on the global market because they are exported in their raw state,” he added.

Mr Ngwenya added that in order to realise meaningful economic development there is also need to issue Diaspora bonds so that locals living abroad can participate in rebuilding the economy.

Funds mobilised can then be channelled towards infrastructural rehabilitation such as road dualisation among other critical infrastructural needs.

Retrieved from: http://www.herald.co.zw/look-east-for-fdi-comesa-boss-tells-zimbabwe/

Zim in Busan implementation hitch

24 Oct

ZIMBABWE, a highly aid dependent country has made little steps in implementing measures meant to bail it out of donor dependency, a move likely to shut it out of developmental support from the international community.Zimbabwe was among developing countries that signed a treaty in South Korea in 2011 committing it to implement a raft of measures under a so-called Busan agreement that called for developed countries and donors to start channeling developmental funding to signatory States and move away from humanitarian funding.

Reports submitted at a regional multi-stakeholder forum for East and Southern Africa on development effectiveness last week indicate that Zimbabwe is one of few countries that have failed to implement the Busan agreement.

Collin Magalasi, an executive director with AFRODAD, said Zimbabwe’s situation was different from that of other countries when it signed to Busan. “Busan took place when Zimbabwe had no donors, which was very different from other countries,” Magalasi said on the sidelines of the forum. “I think they are trying to put some systems in place but they are too far away. The fact that Zimbabwe does not have many donors as yet should not be an excuse for them not to put systems in place. They better put their house in order because donors will follow the systems,” said Magalasi.
A director responsible for Domestic and International finance in the Ministry of Finance, Margireta Makuwaza, told the delegates that Zimbabwe was not fully funded and that has contributed to delays in the implementation of the Busan principles.

She however underlined the need for government to review the Aid Coordination Architecture (ACA) policy document administered by the finance ministry to improve its implementation with the aim of aligning the policy document with the new constitution.
ACA was crafted in 2009 under the Government of National Unity (GNU) and its principles are premised on the aid Declarations signed in Paris (2005) Accra (2008) and Busan (2011) with a view of ultimately reducing Zimbabwe’s dependency on donors.

It contains guidelines, principles, structures and objectives for coherent interactions between government and the co-operating partners.
“We are not moving at the desired pace in term of implementing the Busan principles but it is essential to bring in the necessary changes to the ACA policy to align it with the new constitution,” Makuwaza said.
The three day regional consultation forum held in Rustenburg, South Africa from 16-18 October 2013, under the auspices of African Union Commission in collaboration with NEPAD Agency, African Forum and Network on Debt and Development (AFRODAD), United Nations Development Programme and the department of National Treasury of the Republic of South Africa, brought together more than 80 participants, mainly government officials, parliamentarians, civil society organisations and journalists from 17 countries.

The forum was held under the theme: “Leveraging Global Partnership to optimize Africa’s Resources – from Busan to Reality”.
The Busan principles aim at reframing the global aid reform agenda from aid effectiveness to development effectiveness which should result in poverty eradication, reducing inequality, sustainable development and enhanced capacities for developing countries.

It also promises engagement with business towards improved regulatory and policy environments for private investment, and business participation in the design and implementation of development policies.
It also calls for openness, trust, mutual accountability and transparent practices as the basis for accountability.

The 2011 forum on aid effectiveness held in the South Korean coast city, Busan, and attended by over 2500 State and non state delegates from developed and developing countries, including more than 300 civil society representatives, holds all the parties to account with an annual monitoring exercise for the aid industry. It put in place systems for countries to focus on the quality of development assistance given by donors.
Under the Busan principles, States are expected to develop a monitoring framework consisting of 10 indicators that measure progress in improving the effectiveness of development cooperation in areas such as the transparency and predictability of aid, gender equality, participation of civic society and the contribution of the private sector.

Busan, which produced an agenda for aid reform was built on the previous aid effectiveness commitments made in Rome (2003), Paris (2005) and Accra (2008) on the principles on aid ownership, inclusive development, transparency, results and accountability.

Busan also brought on board new players in the aid landscape such as China, Brazil and India. These countries agreed, on a voluntary basis to abide by Busan principles.
But two years on, the global partnership which sounds very grand is at risk of fading away in Zimbabwe because of lack of systems as agreed under Busan.

Source: http://www.financialgazette.co.zw/zim-in-busan-implementation-hitch/

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IFC aid sub-Saharan African economy with $5.3b investments in 2013 fiscal year

18 Sep

IFCAccording to Ghanabusinessnews.com investment commitments by the International Finance Corporation (IFC) reached $5.3 billion in sub-Saharan Africa, with projects targeting key sectors in the region’s economy. In a detailed factsheet released early September 2013, the IFC’s activities in sub-Saharan Africa showed strong development impact through record volumes of investment and advisory services for the year ending June 2013.

In addition to its committed record of $5.3 billion new investments, the IFC also carried out advisory services projects worth $65 million in the region in its most recent fiscal year.

According to the IFC it supported infrastructure, health, agribusiness and a range of activities in conflict affected states and helped Africa’s entrepreneurs gain access to finance.

“IFC invested $3.5 billion from its own account, and mobilized $1.8 billion from other investors,” it said in a statement adding “in FY 2013, IFC’s supported projects that provided loans for 54,000 small and medium businesses, encouraged 13.7 million microfinance clients; and improved health and education for 360,000 people.”

Yolande Duhem, IFC Director for West and Central Africa, said, “By focusing on developing Africa’s private sector in key areas such as power generation, transport or agribusiness, we are playing an active role in stimulating sustainable economic growth and job creation in the region.”

According to Duhem, the IFC also believes in boosting regional markets in Africa and many of its investments aim to allow companies to grow beyond national boundaries.

– See more at: http://www.ghanabusinessnews.com/2013/09/14/ifc-aid-sub-saharan-african-economy-with-5-3b-investments-in-2013-fiscal-year/#sthash.kmJFss9X.dpuf

AFRODAD Supports the Zimbabwe Alternative Mining Indaba (ZAMI2013)

11 Sep

DSC00191The Zimbabwe Environmental Law Association (ZELA), the African Forum and Network on Debt and Development (AFRODAD), and other supporting partners are hosting this year’s Zimbabwe Alternative Mining Indaba (ZAMI) from the 10th- 11th of September 2013 at Crown Plaza in Harare.

The 2nd ZAMI follows the success of the inaugural ZAMI that was jointly organised and hosted by ZELA, the Economic Justice Network (EJN), the Zimbabwe Council of Churches (ZCC) and the Chiadzwa Community Development Trust (CCDT) from the 11th-13th of September 2012. This year’s ZAMI was preceded by the Provincial Alternative Mining Indabas in Manicaland and Midlands whose main objective was to provide a platform for communities affected by mining operations to discuss amongst themselves with policy makers, government, mining companies and civil society, the impacts of mining on livelihoods, human rights and environmental sustainability among others. This year’s ZAMI will be held under the theme “Community Rights, the key to Empowerment.”

AFRODAD engages Tanzania Parliament over Domestic Public Debt Management

2 Sep

TANZANIA DOMESTIC DEBT COVER_spine

Officials from the African Forum and Network on Debt and Development (AFRODAD) and the Tanzania Coalition on Debt and Development (TCDD) met Tanzania’s legislators on the 31st of August 2013 to discuss findings of a study conducted by the former on the country’s domestic public debt management. AFRODAD also took the opportunity to promote best practices of borrowing in the form of a charter of principles developed from its experience in lobbying on debt cancellation over the past 17 years.

Commenting on the development, AFRODAD’s Executive Director Collins Magalasi said the organisation had launched studies into domestic debt management in 2012 after noting trends pointing to increased dependence on that source of finance. He said the lack of resources available to poor countries in recent years has forced some governments to turn to new ways of raising finance such as borrowing from domestic markets. AFRODAD links the increase in domestic borrowing by some countries to the drying up of concessional loans and the reduction in aid caused by the global financial crisis among other factors.

“Unfortunately policy discussions in Africa have mainly focused on external debt, mainly to debt relief under the Heavily Indebted Poor Countries (HIPC) and Multilateral Debt Relief Initiative (MDRI). AFRODAD now believes that it’s just as important for governments to assess the sustainability of total debt (both external and domestic debt),” said Magalasi. Magalasi further bemoaned the fact that there is no internationally agreed benchmark for assessing the sustainability of domestic debt unlike in the case of external debt. “The result is that no clear guidelines exist on what poor countries should do with their domestic debt markets,” he said.

The research report (Domestic Debt Management in Africa: The Case of Tanzania) reveals that money and capital markets in Tanzania were generally non-existent during the era when the country pursued socialist principles of economic management. However the government launched financial sector reforms aimed at supporting a stable macroeconomic framework in 1991 reversing this approach. This included the development of a national debt strategy in 2002, which was later revised in 2011.

Using the provisional benchmarks suggested by Debt Relief International (DRI), Tanzania would seem not to have any domestic debt sustainability problems from the Domestic Debt/Gross Domestic Product (GDP) and Domestic Debt/ Government Revenue perspectives. However, the country’s Domestic Debt Interest Payments/ Government Revenue give a different picture. According to the DRI ratio interpretation, Tanzania can be considered to have a potentially unsustainable domestic debt burden.

“The approach of this ratio to the potentially unsustainable range should sound as a warning of the increasing domestic debt burden in the country and should thus be treated with caution,” says AFRODAD. The report also raises concern that interest payments on domestic debt have been commanding an increasing proportion of both government revenue and recurrent expenditure compared to external debt interest payments, from a cost perspective. Furthermore, the banking system is by far the dominant holder of government issued securities in Tanzania. According to this report by AFRODAD, there is excessive domination by one sector in the purchase of government securities does not augur well from a “systemic risk” point of view.

The report also notes that information on the liabilities of state owned enterprises is not included in publicly available sources of data. In principle, when government makes guarantees for non sovereign borrowings and liabilities of regional and local governments, and public/private sector enterprises it adds onto the domestic debt as contingent liabilities when they fail to pay. AFRODAD argues that the government must publish the size and attributes of contingent and other fiscal risks in line with full disclosure of fiscal information.

Notably, Tanzania has the basic legal and institutional framework to manage domestic public debt. However AFRODAD has identified some areas which merit some reforms through appropriate amendments. For instance, it asserts that domestic debt should be mentioned more explicitly in the relevant sections of the constitution, which should also clearly extend the authority of the Union’s National Assembly over that aspect of borrowing. AFRODAD also notes that the constitution does not mention the existence and the roles of the central bank, which is a key actor on domestic debt management. AFRODAD believes parliament needs to play an effective oversight role over domestic debt but they lack the capacity to play an effective role in controlling government’s loan contraction activities. AFRODAD therefore calls for Parliament to be assisted with extra research capacity to carry out budget analysis.

Additionally the report shows that other stakeholders such as civil society currently play a marginal role on the issue of domestic debt. AFRODAD implores civil society to build its capacity on this issue to enable it to play an effective watchdog role and also ensure extensive economic literacy on public debt targeted at the public. The organisation also says that legislative reforms are needed to give civil society legal and institutional recognition in the process of public loan contraction and debt management.

AFRODAD, which is a pan African civil society organisation that has lobbied for debt cancellation and addressed other debt related issues since inception, has also carried out similar studies in Kenya, Senegal, Ghana, Malawi and Zambia. It works in close partnership with likeminded local organisations such as the TCDD to encourage African governments to manage borrowed resources better. The TCDD is a coalition of CSOs that was established in Tanzania in 1998. TCDD campaigns for sustainable foreign and domestic public debt. It also campaigns for meaningful civil society involvement in the formulation, implementation and monitoring of pro-poor government policies.

AFRODAD commemorates International Women’s Day

13 Mar

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By Angela Machonesa

The gender agenda has been on the tables for a long time now. The reality that gender equality matters for development outcomes and development policy-making is not new. The fact that treatment of women is positively related to economic prosperity is becoming a cliché in the development discourse. 

It is true that when women are given economic opportunity, the benefits are large not only for their families, but for their communities, and ultimately for national development efforts and this is well pronounced in policy papers. Indeed policy makers know that opening economic options for women puts poverty reduction on a faster track and steps up progress towards the Millennium Development Goals, which include the eradication of poverty and hunger by 2015.

For how long then will these pronouncements be made without adequate action on the ground?

More talk, less action

As Eve Odete points out, the success in efforts of empowering and investing in women for development vary largely across Africa. The extent to which numerous acclaimed action plans like the Beijing Plan of Action and the domestic and international legislation like CEDAW have been translated into real programmes with clear policy outcomes for African women is minimal. 

The global economic slowdown, which was most severe in advanced economies (in terms of decline in GDP), had several ripple effects on middle and low income countries and devastating impacts for women via declines in the demand for manufactured and commodity exports, plummeting tourism expenditures, and a drop in foreign  direct investment.

Budgets for women’s programmes remain insignificant as the agencies that are created or expanded to implement gender programmes remain under-resourced since major funding partners are in turmoil. Specific policy pronouncements have been made in relation to women’s right to property, participation in decision making, and safety nets for vulnerable groups against the impact of harsh macro-economic policies. These too have remained on government policy papers and on the lips of the agitating groups.

They have lacked in time-bound targets and benchmarks for monitoring.  The role of NGOs in the consultation and agenda setting has been nebulous as most structures for such  engagement have remained unclear and un-funded  even when these have been clearly spelled out in legislation

Another channel by which developing countries were affected by the crisis is the drop in remittances from family members living in developed economies. The anti immigration stances in Euro zone have led to a lot of layoffs of African immigrants thus affecting household incomes back home. Like former policy prescriptions, the reduced role of the state in welfare sectors have also increased the burden on women due to increased unpaid work and/or precarious employment and reduced or for-fee social services, while in many countries the invisible hand of the market has failed to pull women out of poverty.

Limitations in enacting laws that seek to protect women range from the harsh realities of macro-economic programmes, devastation of armed conflict, the emergence of counter social forces opposed to women’s rights, weaknesses of democratic political institutions, the weakness of a vigorous civil society and the lack of political will.

The Progress of Nations Report (2000) published by the United Nations Children’s Fund (UNICEF) cautioned all of us, and indeed we ought to take this warning seriously that, “The day will come when nations will be judged not by their military or economic strength, nor by the splendour of their capital cities and public buildings, but by the well-being of their peoples, i.e. by their levels of health, nutrition and education; by their opportunities to earn a fair reward for their labours; by their ability to participate in decisions that affect their lives; by the respect that is shown for their civil and political liberties; by the provision that is made for those who are vulnerable and disadvantaged; and by the protection that is afforded to the women and growing minds and bodies of their children”

Addressing the economic crisis requires a direct focus on women’s well-being. The danger in the current crisis is that governments will overlook the needs of women when deciding how to allocate funding in stimulus packages and external aid, or in making cuts.

It is more important than ever that women have equal representation in decision-making on public spending, both within governments and in global advisory bodies. Clearly, the persisting economic crisis, coupled with ecological destruction, which negatively impacts on the overall conditions for sustainable development, demand that we make clear that no effort to reduce poverty can succeed if half of the world’s population is not taken into account.

Women and taxation

To circumvent the effects of global turmoil and to promote sustainable economic growth and poverty reduction, countries have been urged to turn to domestic revenue accumulation mechanisms like taxation.  Taxation indeed generates critical resources for social expenditure. However, policy interventions in the area of taxation have shifted from taxing income to taxing consumption. This has negatively affected desired outcomes in the area of gender equality. Through the Value Added Tax (VAT), and the gendered patterns of how people consume, women are highly taxed as they take a bigger proportion of household expenditure. Mainstreaming a gender equality perspective into general tax policy analysis can significantly improve the quality of public policy.

As Terrence Smith points out, most discussions of taxation use a  definition of tax which is too narrow and neglects what can be called the “unpaid  labour tax” or “reproduction tax” which women pay, in terms of their time and effort (and money) in the reproductive work of bearing and raising children and caring for other members of society. This work, like other forms of taxation, contributes to the general welfare of society and is essential to the functioning of the economy and society (Women’s Budget Initiative, 1997). Women, however, do not receive any direct reward for this work, which is in effect a tax which they bear and men do not. Although the size of this tax is difficult to quantify in monetary terms, its value far outweighs the value of the heavier income tax burden on men.

The Gender dimension of debt 

Basic human needs in Africa have been jeopardized by the debt crisis. The debt burden has particularly harsh consequences for women. Debt repayments and the implementation of conditionality attached to loans have a severe impact on the provision of government services so desperately needed by women and their households. In addition, structural adjustment programs have destroyed the African agricultural sector, with a devastating impact on women, who are the majority of African farmers. This has led to what many call the “feminization of poverty” in Africa.

Women suffer not only from national debt, but also from individual and household debt. Microcredit models imposed by financial and other institutions from the North have had significant impacts on women in the South. They have contributed to the collapse of traditional forms of credit, entailed the handing over of personal possessions as collateral for credit and resulted in women and their households becoming increasingly trapped in a vicious circle of indebtedness and poverty.

Given the severe impact of the debt on women, much more work needs to be done to integrate gender into our alternatives and strategies loan contraction and debt mamanagement.

Missing women in Mining

Women are still largely excluded from participating in the extractive sector and ultimately obtaining benefits from it. The reasons for this anomaly range from the historical factors of colonisation, apartheid, and racial and gender discrimination to the dominance and perpetuation of patriarchal, paternalist- tic and cultural attitudes, which dictate whether or not women should work, where they should work, how much they should earn, how they should use their income, where they should live, and so on . A number of obstacles hinder greater participation in the sector, namely, women’s lack of access to education in the past, lack of access to training in technical and engineering fields and entrepreneurship, lack of access to finance, cultural barriers and attitudes, and generally the dominance of a patriarchal system that undervalues women.

Women are not safe in their communities. Disturbingly, security forces are overwhelmed by the insecurity fostered by violence within the communities that prevents freedom of movement and avert unfettered access to community spaces, education and employment opportunities. Eliminating gender violence is not just a moral issue but a major economic issue. It is an issue that everyone pays for – not just women. Higher health care costs and more frequent visits to hospital emergency departments pose a burden to families and to the state. Tourists and investors are gravely concerned when they witness heinous acts of gender violence in the country. Parents often will keep girls back from school for fear of rape. In economic terms, there are direct and long-term costs for both the individual and the state associated with mental and physical health care provision, and increased household poverty levels as a result of absenteeism, lower worker productivity and reduced income generation.

Women coalitions and groups have shouted and cried enough against injustices. Angry mothers have protested for ages against assaults while trying to sell their goods at the markets, or harassed while trying to take their children to clinics. Indeed what kind of a society are we that are failing to respect the female specie? The momentum for the gender agenda has never been this high, policy makers and global systems must now effectively deliver for women.